Post-updates to our ESG scoresheet for banks under our coverage (refer to our thematic note, Banks: In Pursuit Of Net Zero), we maintain OCBC’s ESG score at 3.1. Hence, there is no change to the 0% ESG premium/discount that we attach to OCBC Bank’s intrinsic value to derive OCBC's target price.
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OCBC's ESG – The positives.
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As a signatory to the Net-Zero Banking Alliance (NZBA), OCBC is committed to an orderly transition towards a net-zero economy for itself and customers. As such, OCBC has embarked on its journey towards achieving net zero by 2050, with an interim target of 2030 or sooner.
OCBC has committed to invest more than S$25m to increase the use of renewable energy in its energy mix for operations over four years to reduce its carbon footprint in Singapore, Malaysia and Greater China.
OCBC has also set a target of S$50bn by 2025 for its sustainable financing portfolio – this was surpassed in end-2023, when its sustainable financing commitment reached S$56bn.
Areas for improvement?
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
