Sustainable finance

Environmental finance

Standard Chartered is helping to finance a shift to the low-carbon economy. We have committed to take a lead role in the financing of new renewable energy and clean technology projects and companies globally, focusing on Asia, Africa and the Middle East with a total project value of $8–10 billion over the five-year period from 2007–2012.

Our Wholesale Banking environmental finance business specifically focuses on clean and renewable energy, water and energy efficiency, as well as carbon trading. And we are working with our peers and other stakeholders in the financial services sector to encourage their greater engagement in responding to climate change.

Renewable energy

We have created a specialised renewable energy finance team, within our environmental finance business. The business covers a wide range of renewable sources, including energy from waste, geothermal and coal bed methane as well as more familiar options such as wind and solar. The team concentrates on investments in our core markets, an important distinction as most global investment to date has been directed towards Europe and the US.

The global financial crisis has also impacted the renewable energy sector with investment slowing as liquidity constraints reduce the funds available.

At Standard Chartered, we have responded by extending our involvement in this sector, advising renewable equipment manufacturers, as well as installation projects and sponsors. Our wide experience and close relationships with governments globally means we are often asked to provide specialist advice. In 2008, for example, we assisted a national government to create a regulatory system for renewables that will help support further wind projects.

On the international level, at the Clinton Global Initiative in 2007, we committed between $8 billion and $10 billion to finance renewable and clean energy projects by 2012. To date, we have financed $1.4 billion of projects in Asia, Africa and the Middle East and $1.8 billion in Europe.

Energy efficiency

In 2008, Standard Chartered became the first bank to partner with the Asian Development Bank (ADB) to support energy-efficient investment in China. We provide medium-term finance for energy-efficient systems, initially for buildings, while ADB provides a partial guarantee. The first programme is worth up to $117 million (800 million yuan) over nine years (see our case study below).

Carbon trading

Most carbon trading to date has been in Europe, stimulated by the European Union’s emissions trading scheme. Through our carbon trading desk in Dubai we work across Asia, Africa and Europe, helping clients ranging from small businesses to huge conglomerates to access the carbon markets and get the best price for their Certified Emission Reductions (CERs). The CERs we have sold have come from renewable energy or energy-efficiency projects. In 2009, we aim to expand origination of carbon trading into Africa.

Water

Some of our markets are among those most affected by scarcity and poor quality of water and this situation is expected to worsen because of climate change and population growth. In 2008, we carried out a strategic review of investment opportunities to identify how best to support water-related projects. We already act as lead arranger in water sector project finance deals in the Middle East, and are developing a similar business in Asia. Principal finance is active in making investments through the recently established Standard Chartered Bank – Infrastructure Leasing and Financial Services (SCB – IL & FS) Asia Infrastructure Fund including:

  • A $71 million investment in Chinese water supply and waste-water treatment companies
  • A 50 per cent interest in MPC, a large North Asian power generation company with 35 per cent of net capacity or 1,370MW in wind and hydro power plants, which is increasing its proportionate share of renewables

Asian Development Bank

Energy–efficient investment

In 2008, we partnered with the Asian Development Bank on a credit guarantee programme to support small and medium-sized private sector energy-efficiency projects in China.

The Energy Efficiency Multi-Project Financing Program helps energy users in China to access finance to improve energy efficiency in existing and new buildings. The programme finances retrofitting of existing buildings, typically producing energy savings of 20–40 per cent. Given China’s rapid urbanisation, improved energy efficiency of buildings will achieve substantial long-lasting reductions in energy use and greenhouse gas emissions.

 
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Retail banking

We have continued to promote online banking services to our retail customers. Electronic banking reduces paper consumption, as well as the energy needed to distribute hard copies of statements and other communications. We have launched and enhanced our online banking offering from 16 countries to 25 countries in 2008 with a 25 per cent year-to-date increase in registered customers and 35 per cent increase in activities.

In 2008, we have launched eStatements in China and Hong Kong, and aim to roll out eStatements capabilities in 17 markets in 2009.

We aim to suppress 40 per cent of paper statements across our key markets by 2011 and make significant progress towards this end in 2009 to save in excess of 420 trees a year.

Climate Principles

In 2008, we were one of the founders of the Climate Principles, a comprehensive framework that guides best practice across the financial sector to respond to the risks and opportunities of climate change. It strengthens our existing commitments to embed climate change considerations into business strategy and activities.

As a signatory:

  • We have proven that we have a robust low-carbon strategy and manage our operational emissions
  • We commit to address climate and carbon issues in our business strategy and activities
  • We commit to engage and support suppliers, clients, staff and policy makers to move to a low-carbon economy
  • We review and disclose against the Principles annually

South Korea SinAn solar power plant

The largest photovoltaic solar project in Asia

This is Korea’s flagship solar project and one of the largest in the world. It began operating in two phases during 2008, ultimately with almost 25 MW capacity. The plant produces 33,000 MWh of electricity a year – enough to supply 7,200 households with non-polluting energy year after year. This project alone helps Korea reduce carbon dioxide emissions by 24,000 tonnes a year – the equivalent of planting 168,000 trees.

 
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Highlights

  • $71minvestment in Chinese water supply and waste-water treatment
  • 35 per centincrease in online banking activity in 25 countries
  • $8–10bncommitted for renewable and clean tech projects by 2012