The Philippines is the fourth most vulnerable to climate change, according to the Global Climate Risk Index 2020 of Germanwatch Institute, which analyzes the extent countries and regions have been affected by weather-related loss events. Under the Paris Agreement on Climate Change, which aims to reduce global warming to 1.5 degrees Celsius, the Philippines committed to reduce 70% of its greenhouse gas emissions by 2030.
RCBC believes the financial services sector plays a vital role in achieving the targets set under the Paris Agreement and in meeting the UN SDGs to support the fight against climate change.
Understanding and managing climate change is prudent risk management at RCBC. As a leading domestic financial institution and a responsible corporate entity, the Bank is committed to doing its part to reduce global warming and support the government in meeting the UN SDGs.
Sustainable Finance Strategy
RCBC is committed to upholding environmental and social responsibility in all its business activities. It recognizes that balancing financial priorities with non-financial factors, such as environmental and social safeguards, is essential to being a good corporate citizen. This is fundamental, not only to risk management, but also to the larger interest of its stakeholders.
The Bank believes that responsible lending entails having good sustainable practices as well as promoting awareness of environmental and social issues within its organization, among its clients, and in the communities it serves.
Sustainable Finance Risks and Opportunities
RCBC believes that the transition to a low-carbon and climate-resilient future entails risks as well as opportunities.
According to the International Energy Agency, this global transition will require more than EUR30 trillion of investment in clean energy and efficient infrastructure by 2035. To be well-positioned to participate and finance this transition, RCBC will align its business strategy with national priorities and rebalance its portfolio mix over time for value creation and stakeholder benefit.
It has taken important steps to reduce its corporate carbon footprint and channel funds to sectors that contribute to a low-carbon and climate-resilient future, not only in the Philippines, but also within the ASEAN region. In December 2020, RCBC announced that it will no longer extend financing to new coal-fired power projects in the Philippines. The announcement came after the Philippines’ Department of Energy (DOE) said it is keen on increasing the share of renewable energy as the country’s power source to 43% by 2040 from 29% in 2020.
Below are RCBC’s initiatives to lower its carbon footprint and support sustainable finance activities to help meet the UN SDGs:
- Transformed its Corporate Head Office in Manila into a LEED Gold-certified building in 2018
- Funded Green Projects that support the UN SDGs, in particular, the Clean Water and Sanitation, Affordable and Clean Energy, Industry, Innovation and Infrastructure, Sustainable Cities and Communities, Climate Action, and Life Below Water goals
- Channelled more than Php30 billion to projects and loans that contribute to reducing the carbon footprint of the Philippines
- Funded social projects that support the UN SDGs, in particular, the Good Health and Well-being, Quality Education, Decent Work and Economic Growth, Reduced Inequalities, and Sustainable Cities and Communities goals
- Channelled more than Php10 billion to fund projects and loans that provide access to social needs, directly improving the living conditions of Filipinos
RCBC Sustainable Finance Framework
The RCBC Sustainable Finance Framework of April 2019 articulates RCBC’s strategy to raise funds and lend to priority sectors. In June 2019, the Bank raised Php8 billion (USD167 million), the first peso-denominated Sustainability Bond under the ASEAN Sustainability Bond Standards, to refinance Eligible Green and Social Assets. In September 2019, it raised an additional USD300 million to fund Eligible Green and Social Assets. Investor response to these landmark transactions was overwhelming. The transactions were oversubscribed in multiples and brought in investors from all major financial centers of the world.
In August 2020, RCBC was recognized by the Asian Banking & Finance Awards as the Philippines Domestic Initiative of the Year for Sustainable Financing. This was followed by recognition from the Global Banking & Finance Review in December, naming RCBC as the Best Green Bank Philippines 2020. Previous to these, the Bank was awarded “Best Issuer for Sustainable Finance – Financial Institution”, and “Best Sustainability Bond” by The Asset Asian Awards for its Php8 billion ASEAN Sustainability Bond, the first ASEAN Sustainability Bond issued in the Philippines and upsized from the target offering of Php5 billion.
The world faces unprecedented challenges on account of climate change. Achieving global goals requires the participation of all sectors of civil society. We are ready to do our part.
Green and Sustainability Bonds Impact Report 2019
Green and Sustainability Bonds Allocation Report 2019