Smart cities sustainable financing framework launched in Asia

The framework is described as a “timely and strategic” initiative by the Carbon Trust

The framework is described as a “timely and strategic” initiative by the Carbon Trust

The United Overseas Bank (UOB) in Asia has launched the UOB Smart City Sustainable Finance Framework (UOBSCSFF) to make sustainable financing more accessible to companies that are helping to create smart cities.


The framework is aligned with the United Nations (UN) Sustainable Development Goals (SDGs) and is supported through the Monetary Authority of Singapore’s (MAS) green and sustainability-linked loan grant scheme.


Sustainability criteria


The framework sets out the criteria the bank’s corporate and institutional clients must meet when accessing a range of products, from green- or sustainability-linked loans and trade finance facilities to other sustainable banking products.


These criteria include requiring companies to have clear sustainability strategies and objectives, to achieve their sustainability performance targets and to use the proceeds to further their sustainability agenda.


Under the framework, businesses must also be able to demonstrate how their activities promote a better quality of life for residents through the use of renewable energy, green building construction, improved energy efficiency, green transportation, sustainable water and waste management and/or climate change adaptation.


UOB will monitor a company’s management of loan proceeds and the environmental and social impact of its business activities on an annual basis.


With the UOBSCSFF, companies committed to building sustainable and smart cities can apply for sustainable financing without having to develop their own financing framework which can take time and resources. This means that they can focus their resources on contributing to a better environment for all.

“Financial institutions can and must play a part, together with governments and businesses, to help channel more funds to sustainable development”

“The United Nations estimates that US$2.5 trillion is required annually for developing countries to bridge the financing gap in achieving the SDGs by 2030,” said Frederick Chin, head of group wholesale banking and markets, UOB.


“Financial institutions can and must play a part, together with governments and businesses, to help channel more funds to sustainable development. Such efforts will go a long way in making the cities of Asia more sustainable and liveable.


“At UOB, we are committed to balancing opportunity with responsibility and helping businesses across the region advance responsibly through sustainable financing. Under our UOBSCSFF, we will be able to support the sustainability efforts of more companies from various sectors, working with them closely for the development of sustainable and smart cities.”


Second opinion


The Carbon Trust, a leading consultancy specialising in climate and environment-related advisory and assurance services, provided a second party opinion on the bank’s UOBSCSFF in accordance with the green loan and the sustainability-linked loan principles issued by the Loan Market Association.


“Smart cities are essential to help municipalities and countries manage and rebound from the Covid-19 pandemic. Digital technologies will play a growing role in delivering key public services and supporting economic activities while promoting environmentally friendly practices,” said Lau Xin Yi, green finance lead, South East Asia, Carbon Trust.


“The UOB Smart City Sustainable Finance Framework is a timely and strategic initiative that recognises the multi-faceted needs within smart cities while responding to different financing needs of stakeholders in the form of green loans and sustainability-linked loans.”


The UOB Smart City Sustainable Finance Framework is an expansion of the UOB Green Infrastructure Financing Framework, which the Bank launched in 2019 to provide sustainable financing to companies in the infrastructure sector.


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