Security Bank said it will stop funding new coal projects by 2033 in support of the government’s commitments to reduce greenhouse gas emissions.
The country’s seventh largest bank said that it will work with its energy sector clients that are committed to sustainable development by supporting the use of low carbon energy sources and financing new technologies to help transition to a low-carbon economy.
It added that it will support its clients from both a lending and capital market perspective.
The cessation of coal project funding has been anchored under the bank’s Environmental and Social Risk Management System (ESMRS), according to Security Bank CFO Eduardo Olbes.
With this move, Security Bank now joins the Bank of the Philippine Islands and Rizal Commercial Banking Corporation in ceasing the funding for coal-related projects in the next decade.
RCBC and Security Bank were among the local banks called out by energy advocacy group Withdraw from Coal (WFC) for their continued funding of coal projects. Both banks are involved in bond issuances for coal with Aboitiz Power Corporation, the country’s leading power generation firm. WFC wants a total withdrawal of all funding for coal power projects.
Olbes said that Security Bank is committed to long-term sustainability by advocating lending, investment, and procurement activities that will help the country in transitioning to a lower-carbon economy.”
Under the Philippine Energy Plan 2020-2040, the country aims to have a 35% share of renewable energy in the power generation mix by 2030 and 50% by 2040.
In 2021, the Bangko Sentral ng Pilipinas called on banks to support the country’s energy transition following Asian Development Bank and the Philippine government’s partnership for the energy transition mechanism launched during the United Nations Climate Change Conference (COP26).