We talked about how UOB, along with other NZBA members, voted to drop the 1.5 degree target back in April. A few weeks later, Eco-Business’s Jeremy Chan wrote a puff piece paid for by UOB trying to justify the bank’s decision. Here is a quote from Melissa Moi, UOB’s head of sustainable business:
The shift reflects an evolution from the more “ideological” commitments made in 2021 to today’s pragmatic reset. We are now focused on transparent attribution for target outcomes, avoiding reputational risks from financial decarbonisation shortcuts, and deepening client engagement. This includes educating clients about physical and transition risks and using portfolio analysis to guide tailored support.
Translation: NZBA and UOB used to care about demanding climate ambitions and policy changes. Now they mostly care about not getting caught for greenwashing (“avoiding reputational risks”), keeping lucrative and polluting clients (“deepening client engagement”), and whatever the fuck “transparent attribution for target outcomes” means.
Also, how callous of her to describe a well-researched and thoroughly-negotiated global consensus to protect millions of people from preventable death and suffering as “ideological commitments”.
Moi continues:
So the goal — the North Star — is always to support decarbonisation, recognising the importance of net zero. This “shift” in net zero banking [could] hopefully open the door for more local banks to enter the fray. It helps them understand, conceptually, the nitty-gritty of how to think about target-setting, how to transform their organisations, how to grasp the context of net zero, how to evaluate their portfolios, and how to start managing credit risk related to climate challenges.
What a load of crap. If NZBA and UOB care so much about “open[ing] the door for more local banks to enter the fray”, why stop at dropping the 1.5 degree? Some bankers will look at the watered-down 2 degree target and say “gee, I’m not sure I can commit to that. Can you get rid of the temperature target entirely so that we can join you to understand the nitty-gritty for good vibes?”
There is no good reason why NZBA has to lower its collective ambition to help local banks understand the “nitty-gritty”. The nitty-gritty is, “conceptually”, the same whether your targets are for 1.5 or 2 degrees. And if local banks want to “enter the fray”, trust me, they can figure out the “nitty-gritty” somehow. The key barrier to entry is a lack of courage, not a lack of knowledge.
If smaller banks in developing Asia are intimidated by the level of technical complexity required of them to set net zero targets and manage climate risks, big banks like UOB only have themselves to blame. As I said before, banks are now so accustomed to talking about technicalities, you can hardly be impressed or disappointed by any of them because their true ambitions have been caveated and complianced into a uniform mediocrity. You can only tell where their heart lies when a clear choice between courage and cop-out is in front of them. UOB chose poorly.
Back in April, I wrote:
Like other cause-based business associations, the value of NZBA to its members are virtue signalling and collective lobbying. We climate people tolerate the virtue signalling part when the collective lobbying part aligns with our climate goals. When they voted to lower their standards, they made it clear that they were not willing to lobby for the level of climate actions we need to see. Now, the rest of us need to make sure they can’t get the same virtue signalling value anymore. It’s a choice they made for their alliance, but the true leaders will go elsewhere.
I guess another value of NZBA is for its members to learn from each other (“understand the nitty-gritty”). Unfortunately, if you join NZBA now, the most salient lessons you will learn from your peers is how quickly some will desert the cause when the political wind shifts, and how readily the rest are willing to give themselves a break. A race to the bottom is well underway.
An Inconvenient Thought 