BDO’s sustainable financing breaches P1 trillion mark in 2024

Cuts emissions equal to 1 million cars

MANILA, Philippines — BDO Unibank Inc. funded a total of P1.04 trillion in sustainable finance last year, the largest of any Philippine bank to date, underscoring the bank’s deepening role in advancing the country’s transition toward a low-carbon, more inclusive economy.

The landmark figure is higher by 15.8 percent than the P898 billion loans it disbursed in 2023. The funding has been channeled into projects ranging from renewable energy and green infrastructure to water sanitation, microfinance as well as gender-focused enterprise support.

“From financing water infrastructure projects to supporting renewable energy and battery technologies, these investments demonstrate our dedication to supporting industries that drive environmental stewardship and promote resilience,” BDO president and CEO Nestor Tan said.

“As the leading bank in the country, we strive to lead by example, encouraging other financial institutions and our clients to follow and take meaningful steps toward sustainability,” he added.

One of the most impactful areas of this portfolio is  renewable energy lending. To date, the bank has financed 63 renewable energy projects, generating a combined installed capacity of 2,679 megawatts.

These projects are projected to avoid nearly 4.8 million tons of carbon dioxide emissions annually, equivalent to removing over one million cars from the road or growing 78.8 million tree seedlings over 10 years.

The bank’s financing in this sector includes significant year-on-year growth in both hydro and solar energy projects. BDO’s total disbursed loan amounts for renewable technologies reflect this strategic shift: P38.2 billion to hydro, P21 billion to solar and P25.4 billion to biomass, among others.

The bank’s commitment to sustainable finance was described as a long-term strategy to help meet the United Nations Sustainable Development Goals and the Philippines’ commitment to the Paris Agreement.

“BDO incorporates sustainability principles in business strategy to mobilize capital toward the achievement of the UN 17 Sustainable Development Goals and a transition to a low carbon economy,” the bank said.

Beyond lending, BDO has taken steps to institutionalize its sustainability efforts. It expanded its sustainable finance framework in 2023 to cover 29 eligible categories and subjected it to third-party review by Morningstar Sustainalytics.

The bank also engaged in climate stress testing with international consultants to better understand its risk exposure across loan, treasury and trust portfolios under high-emission warming scenarios.

According to BDO, the banking industry plays a critical role in the country’s committed transition to a low-carbon economy. However, the transition will require providing access to affordable, reliable, sustainable and clean energy.

“BDO believes that this transition is a journey that requires adopting a balanced approach: acknowledging the difficult trade-offs that need to be made along the way between national economic development that depends on affordable and reliable energy and the relentless pursuit of the broader goal of climate sustainability,” it said.