Singapore banks may need to address indirect exposure to captive coal in their financing policies

[SINGAPORE] Singapore lenders may need to review their overall coal financing policies to clarify how they treat captive coal, and provide granular disclosures on this front as they face increasing scrutiny over their exposure to the energy source.

This is not yet a regulatory requirement, and financed emissions from captive coal are not a data point that ESG rating agencies specifically look at when scoring banks on their sustainability performances.

But more comprehensive disclosures on lending exposures and stronger climate risk management practices do contribute positively to their ratings, agencies told The Business Times.