As the pandemic continues to wreak havoc on the global economy, Rizal Commercial Banking Corporation (RCBC) has called for Asian banks to increase their efforts to combat climate change while promoting long-term development.
RCBC president and chief executive officer Eugene S. Acevedo, in an issued statement, said on the first day of the four-day virtual 37th Asian Bankers Association General Meeting and Conference on “Achieving Sustainable Growth in the New Normal,” hosted by the Asian Bankers Association (ABA) on August 24-27, that the global banking community must address climate change and global warming amid the pandemic.
“With the pandemic continuing its devastating impact on global markets, countries around the world are intensely focused on transforming their economic base and preparing for what appears to be a long, tough journey ahead,” Acevedo said.
Acevedo chaired the first session of this year’s prestigious ABA meet, which was attended by some of the leading regional economists, bank executives, regulators, and representatives from the academe. Focusing on the topic “Responding to Challenges and Disruptions in a Changing Global Ecosystem”, the session featured speakers and panelists who shared their narratives on the challenges and disruptions brought about by the pandemic on their respective communities, and their efforts to find innovative solutions to adapt in the so-called new normal.
Le Xia, chief economist for Asia at BBVA Research Department, said climate change and global heating is a much bigger threat compared to economic challenges brought about by the pandemic and the political tensions between the United States and China.
Ashwini Kumar Tewari, managing director of State Bank of India, agreed that climate change is a “bigger emergency” and that banks should prepare for it.
DBS Group Research managing director and chief economist Taimur Baig for his part said climate change initiatives can “give banks a major shot in the arm” while they struggle with low-interest rates and all the other challenges.
“I think climate or green finance is probably going to be the only real fast-growing aspect of finance in the rest of our professional lives. Everything else is going to be a really hard slog,” Baig said.
He added that banks have an important role to play with the governments around the world, particularly in Asia, as large climate-related finance needs are going to be met through fundraising and issuances.
He brought forward that Asian banks form regional consortiums because of the huge funding needs in terms of green projects, such as renewable energy (RE) sources.
“It is so large [and] very few banks are big enough to swallow it on their own. They would have to be part of syndicates, which will then work side by side with the governments. [For example] The government of Singapore has a $100-billion plan to deal with rising sea levels. China is coming up with numbers that we can’t even fathom [because] it’s so large,” Baig further said.
In the Philippines, RCBC is one of the few Philippine banks leading the efforts to fund sustainable projects including the use of renewable energy. It is also one of the first major financial institutions in the country to formally announce that it will stop financing coal-fired power projects, which have a negative impact on the environment.
ABA is a regional association of commercial banks and financial institutions from some 25 countries in Asia Pacific. Established in 1981, the ABA aims to provide a forum for advancing the cause of the banking and finance industry in the region and promoting regional economic cooperation. RCBC is an active member of ABA and is currently represented in the ABA Board of Directors by Acevedo.