UOB’s sustainable financing up 21% at S$70.1 billion

[SINGAPORE] UOB grew its sustainable financing portfolio to S$70.1 billion in 2025 as it moved its net-zero reporting timeline to provide a mid-year snapshot of its financed emissions.

The bank’s 2025 sustainable financing portfolio rose 21 per cent from S$58 billion recorded at the end of 2024, it said in its sustainability report released on Thursday (Mar 19).

A key driver of this lending was the small and medium-sized enterprise (SME) segment, with S$7.8 billion extended in loans to help SMEs accelerate sustainable business practices.

To streamline this process, UOB enhanced its sustainable finance frameworks in 2025 to incorporate the Monetary Authority of Singapore’s (MAS) Singapore-Asia Taxonomy.

The bank said that this integration simplifies access to sustainable financing, particularly for its SME clients.

New reporting cycle

In a move to align its net-zero reporting with its annual sustainability publication, UOB has changed its reporting period for financed emissions. While the 2024 data was reported as at Dec 31 that same year, the 2025 metrics are now reported as at Jun 30, 2025, which will now be the standard reporting period, said the bank.

Under this new cycle, UOB reported that it is tracking between 3 and 39 per cent below reference pathways across its emissions intensity metrics for its net-zero commitment.

For instance, the power sector’s portfolio emissions intensity was 39 per cent below its reference pathway, while the real estate and automotive sectors were both 8 per cent below their respective pathways.

However, the bank provided a candid near-term outlook for the built environment.

UOB projected that its financed emissions intensity for the construction sector may exceed the reference pathway in the short term. This is driven by an uptick in regional construction activity, compounded by the limited ability to adopt low-carbon construction options at scale due to cost and commercial constraints.

Sectoral tailwinds ahead

Looking ahead, UOB highlighted several macroeconomic and technological tailwinds expected to support its sustainable financing strategy.

In real estate, growing market demand for green building certifications has meant that such buildings are commanding rental premiums of up to 11 per cent and higher occupancy rates, noted UOB.

Meanwhile, declining costs for battery energy storage systems (BESS) are improving the economics of low-emission construction sites. Global average BESS prices fell 27 per cent in 2025 to US$74 per megawatt-hour, making it more financially viable to replace or supplement traditional diesel generators, said UOB.

Beyond stationary power, the bank added that the electric vehicle (EV) industry is also set to see changes across Asean. Regional policy shifts are accelerating the EV transition, with countries such as Indonesia, Malaysia, Thailand and Vietnam introducing policies encouraging domestic EV manufacturing.

Indonesia and Thailand, for example, have coupled consumer EV purchasing incentives with long-term industrial development plans, shifting production closer to regional markets, noted UOB.

In Singapore, UOB observed that policy momentum is further driving the transition towards lower-carbon transport. The report highlighted the country’s introduction of the Heavy Vehicle Zero Emissions Scheme and the Electric Heavy Vehicle Charger Grant in 2025 as key steps to encourage the adoption of electric heavy vehicles and support the deployment of charging infrastructure.

Additionally, to address the aviation sector, the bank pointed to Singapore’s upcoming sustainable aviation fuel levy, which kicks in this October, to meet a 1 per cent sustainable fuel usage target for all departing flights.

On the broader energy front, UOB also sees momentum building for the Asean power grid. The bank cited a 2025 joint development agreement among Singapore, Vietnam and Malaysia aimed at facilitating cross-border renewable electricity flows, alongside the launch of the Asean Power Grid Financing Facility to catalyse grid upgrades.