How green should a green loan be? DBS, OCBC’s loan to Hong Leong tests limits of sustainable finance

[SINGAPORE] South-east Asia’s two largest banks, DBS and OCBC, along with property developer Hong Leong, were recently called out over a green loan for the development of a mixed-use residential project at Tengah. 

A post on online publishing platform Substack said that a BT reader had sent an e-mail criticising the S$692 million loan’s “green” label as a “clear case” of greenwashing, as its construction would involve the clearing of secondary forest in Tengah, home to abundant native flora and fauna. 

In response to queries from The Business Times, DBS – the anchor lender and sole green adviser of the deal – and Hong Leong have said that the land parcel does not include any primary forests. An environmental impact study found that the site consists predominantly of scrubland, herbaceous vegetation and abandoned land-forest.