The real climate test for South-east Asian banks has begun

SOUTH-EAST Asia’s banks stand at a critical crossroads. They have embraced climate ambition on paper – announcing net-zero targets, strengthening governance and expanding sustainable finance portfolios – yet many remain among the region’s largest financiers of coal, oil and gas and dependent industries. Most have not set out plans to decarbonise high-emitting sectors.

The contradiction is striking in a region that is projected to account for 25 per cent of global energy demand growth by 2035, and the world’s fastest rise in carbon dioxide emissions by 2050.

Decisions made by the region’s key lenders in the coming years will determine whether they become catalysts for a low-carbon economy, or obstacles to it.