UOB has announced initiatives to enhance its support for small- and medium-sized enterprises (SMEs) in sectoral value chains, facilitating their access to sustainable financing through its Sustainable Financing Frameworks. This move includes incorporating the Singapore-Asia Taxonomy, offering SMEs a streamlined process in aligning with global best practices suited for regional needs.
As the sole Singapore bank incorporating the Monetary Authority of Singapore’s (MAS) Technical Screening Criteria of the Singapore-Asia Taxonomy across all six of its sector-focused Sustainable Financing Frameworks, UOB has independent validation from consultancy ERM for additional credibility. These frameworks span Circular Economy, Green Buildings, Sustainable Cities, Sustainable Food and Agribusiness, Sustainable Trade, and Transition Finance.
This development highlights UOB’s central role in ASEAN’s move towards a low-carbon, climate-resilient economy. "UOB’s long-term vision is to balance environmental integrity with practical economic considerations, ensuring SMEs can decarbonise while maintaining business growth," shared Ms Lim Lay Wah, Group Head of Sector Solutions and Global Financial Institutions Group, UOB.
The updated frameworks are designed to ensure inclusivity in sustainable financing. They now explicitly include companies within industry value chains integral to sustainable projects. UOB offers a risk-based assessment model for financing applicants, requiring different levels of compliance evidence based on the risk profile of their activities.
The Transition Finance Framework's revision extends beyond the basic framework to address specific measures for a fair transition within the oil, gas, and chemicals sector. These adjustments allow businesses time for pivoting towards more sustainable practices at appropriate paces.
Additionally, UOB intends to integrate globally recognised frameworks, such as the EU Taxonomy, wherever possible, to maintain a comprehensive and forward-looking stance. Ms Lim emphasized, "Through these enhanced frameworks, we deepen our impact, fostering a just transition where no business is left behind. Sustainable finance is pivotal to accelerating ASEAN’s decarbonisation efforts."
UOB's contributions to sustainable financing were substantial in 2024, distributing S$58 billion to support ASEAN's green economy. The bank aided 580 SMEs on their sustainability path, financed over 175 green buildings, boosted the development of 20 green data centres, and facilitated S$7 billion in sustainable trade financing for agri-commodities and responsible supply chains.