OCBC on Tuesday said it has adopted the Equator Principles, an internationally recognised risk-management framework for financial institutions worldwide.
The framework guides banks on how to determine, assess and manage environmental and social risks in large-scale development projects.
OCBC said on Tuesday that the move is part of the bank's push towards responsible financing, and builds on its previous commitments to sustainability.
The Equator Principles are based on the International Finance Corporation Performance Standards published by the World Bank Group.
They cover a majority of the project-finance transactions originating from emerging markets, providing a minimum standard for due diligence and monitoring to support responsible risk decision-making.
OCBC said its adoption of the Equator Principles was an extension of the responsible-financing framework the bank has put in place since 2017.
It added that as a signatory of the Equator Principles, it will further strengthen its environmental, social and governance related disclosure and reporting. OCBC will do so by disclosing information related to large-scale projects the bank has financed globally.
This will ensure that strict environmental and social standards are applied in line with the international best practices during the project development and construction process, including follow-up monitoring.
OCBC group chief risk officer, Vincent Choo, said the bank has aligned its efforts internally with the objectives of the Equator Principles, to work responsibly with clients through its business units to strengthen its position as a sustainable bank in the region.
Mr Choo noted that infrastructure development is a key economic driver in emerging Asia to sustain growth in the region. The demand in Asian markets to finance large projects, such as those to expand transport links and improve access to energy and water services, has increased significantly.
"Because of their size, these projects often have a significant impact on the environment and neighbouring communities," he added.
"It is therefore our responsibility to ensure that the projects we finance are developed in a socially responsible manner and reflect sound environmental management practice."
Earlier this year, OCBC announced a new target of S$25 billion by 2025 for its sustainable finance portfolio, after having surpassed its initial target of S$10 billion in the first quarter of 2020, two years ahead of schedule.