Pick up any major Southeast Asian bank’s sustainability report and you will find a coal funding commitment. The language is confident. The dates are specific. But banks from Jakarta to Kuala Lumpur and Singapore are hiding behind a hazy smokescreen by funding industrial coal.
New data reveals a clear majority of people across Southeast Asian countries – Indonesia, Malaysia and Singapore – want bank funding to end for all companies, including coal, that are making climate change worse.
The first nationally representative opinion poll on climate change and coal financing in Southeast Asia, conducted by YouGov and commissioned by clean energy finance organization Market Forces, is revealing.
Around two in three people in Singapore (69 percent) and Indonesia (66 percent), and three in five Malaysians (59 percent), expect that a bank’s commitment to stop financing new coal applies to all coal power plants – including industrial ones – built to power nickel and aluminum smelters.
Put simply, most people want banks to end the smoke and mirrors.
Customers are being tricked by banks, which claim to be winding back funding for coal. Yet many of Asia’s biggest banks are still backing industrial “captive coal” power plants built by mineral companies to run their smelters off the public grid.
Industrial coal power is the fastest growing coal category in the region, threatening the shift to clean energy.
In the past six years, industrial coal capacity in Indonesia has virtually quadrupled to nearly 20 gigawatts, according to the Center for Research on Energy and Clean Air (CREA). Development pipelines risk pushing industrial coal power to a mammoth 31 GW, more than twice the total amount of coal power currently produced by Malaysian plants..
Some of the biggest banks from Singapore and Malaysia, including OCBC, DBS, UOB, CIMB, and Maybank, are all playing a role in propping up industrial coal power.
Singapore’s leading banks have persisted in financing industrial coal power plants and intensified their backing between 2019 and 2024, precisely the years in which those same banks were announcing their coal exit commitments. What’s worse is that the Singaporean banks have been framing their financing as support for minerals needed in the transition to a cleaner energy economy, according to a report by Earthwise Institute.
It’s a clear pattern: some of Southeast Asia’s banks are normalizing a dependence on industrial coal power at a time when the world must end reliance on fossil fuels.
Malaysia’s major banks joined the party to fund industrial coal power a little after Singapore’s banks had laid the financing foundations. But their cash has been critical to propping up the polluting captive coal-powered nickel and aluminum smelters.
The banks hide behind the smokescreen of financing nickel or aluminum production companies, not coal power firms. It is a misleading loophole. The electricity running those smelters comes from coal. Calling it nickel financing while the coal keeps burning is a choice about what to count and what to hide.
The public is sick and tired of this deception and greenwashing by the banks.
The new YouGov opinion poll found that more than one in three people in Indonesia (43 percent) and Malaysia (36 percent), and just under a third of Singaporeans (28 percent) would consider switching banks if they learned their current bank still finances new coal projects. A clear majority of people in all three countries – three in five Indonesians and more than half Malaysians and Singaporeans – do not consider nickel to be green if it is produced using coal power.
Banks financing coal-powered nickel production are not just falling short of their own climate commitments. They are funding operations that their own customers have determined do not qualify as clean and green. In an alarming finding for the financial institutions, more than three in five people associate banks with significant contributions to climate change if they continue financing coal mining and power projects. Conversely, most people think more highly of banks that have stopped financing new coal.
Indonesia is one of the biggest coal miners in the world. But many of the country’s 288 million people are among the most vulnerable to the ravages of floods, landslides and other climate-disasters fueled by coal emissions. Intense storms and flash floods are expected to increase everywhere across Indonesia, damaging crops, food storage, and distribution systems, according to a recent World Bank report.
Banks making climate change worse must be held to account. The financial institutions funding the expansion of the world’s most polluting fossil fuel cannot credibly claim to be exiting coal while transferring the funds that enable industrial power plants to be built.
The newly built coal infrastructure being financed today is designed to operate for at least the next 25 to 35 years, blowing up global climate goals and surging well past any reasonable period of transition to an economy powered by clean energy.
Southeast Asia has spent years building credible sustainable finance infrastructure, disclosure frameworks, transition finance roadmaps and alignment by companies and governments to net-zero targets. All progress rests on credible sustainability commitments, without loopholes and smokescreens. Asia’s banks must come clean.
You can read more about the survey here.
