Security Bank Corp. on Friday announced its commitment to end funding for coal-fired power projects by 2033 as the bank focuses on funding low carbon projects.
The board approved Security Bank’s Environmental and Social Risk Management System (ESRMS) last year, which details the policies and enhanced due diligence required in identifying, addressing, and mitigating environmental and social risks in its operations, lending, and investing practices and supply chain.
“A focus of our ESRMS is to specifically address sustainability and climate risk, as well as health & safety risk in our operations, investment practices, and supply chain,” said Eduardo Olbes, chief financial officer and chairman of the Sustainability Committee at Security Bank.
“A key aspect of the ESRMS is our coal policy, which specifies our commitment to discontinue financing the construction of new coal-fueled power generation plants, with a view to exit funding coal generation by 2033,” Olbes said.
The move is aligned with the government’s pledge during the 2021 United Nations Climate Change Conference of the Parties (COP26) and the 2015 Paris climate agreement to cut greenhouse gas emissions and limit global warming for a more sustainable future.
The bank cited the report of market and consumer research company Statista in 2020, which reported that the Philippines still relies 57 percent of its power supply from coal.
Renewable energy sources such as hydro, wind, solar, and geothermal energy make up only 21 percent of the country’s energy resources.
The bank will now work with clients in the energy sector who are committed to sustainable development by supporting the use of low carbon energy sources and financing new technologies to help in the transition to a low-carbon economy.
Security Bank said it would support these clients, both from a lending and capital market perspective.
“Security Bank is committed to long-term sustainability by advocating lending, investment, and procurement activities that will help the country transition to a low-carbon economy and build resilience to climate change,” said Olbes.