The head of South-east Asia’s biggest bank asked whether the finance industry should “play God” when it comes to balancing action on climate change with more immediate social and economic needs in the region. 

“What do you say to kids in Semarang or somewhere in the middle of Indonesia who are struggling to get electricity, to do their studies or eat their food,” DBS chief executive Piyush Gupta said at Bloomberg’s Sustainable Business Summit in Singapore Wednesday (Jul 27). “For us to say, I’m going to make a moral judgment on electricity use is less important because the planetary considerations are more important - am I the right person to say that?” 

DBS committed to exiting new coal-related financing a few years ago, which Gupta called one of his hardest decisions. As at end 2019, less than 1 per cent of its total loans and advances were to growers and processors of palm oil, an industry often criticised for its impact on rainforests and for labour practices that rely on low-wage migrant workers. 

“There are about 14 million households in Indonesia and Sumatra who rely on small-estate palm oil for a living.” he said. “As a financier, is it right for us to play God?”

Firms may not be able to change their business models overnight, but they “are prepared to make financial commitments to really decent carbon projects, which happen to be in countries like in Indonesia,” Gupta said. “That might help redress some of the economic challenges we have” around a transition that’s fair to all parties.  

Beyond the considerations around financing, DBS has partnered relevant regulators to set up Climate Impact X, an online voluntary carbon market in Singapore for trading high-quality carbon credits, according to its 2021 annual report. BLOOMBERG

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