Complaint against Singapore bank tests SGX climate disclosure regime

Key takeaways

• The Singapore Exchange (SGX) has received a complaint from climate advocacy group Market Forces against OCBC bank for allegedly misleading investors on its exposure to high-carbon assets, testing the integrity and enforcement of Singapore’s new climate disclosure regime.
• At issue is OCBC’s continued financing of Indonesian nickel producer Harita Group, which operates captive coal-fired power plants. Activists claim this conflicts with OCBC’s publicly stated sustainability commitments and coal exclusion policies.
• OCBC says its disclosures are in line with SGX rules and that its lending practices are guided by policies to ensure they “do not adversely impact people, communities or the environment”.

A climate advocacy group has lodged a complaint at SGX against a listed bank for potentially misleading investors about its exposure to industrial coal facilities in Indonesia.

Market Forces, the Australia-based complainant, claims there are material gaps and inconsistencies between Singapore bank OCBC’s publicly stated sustainability commitments and its financing of clients that are still heavily reliant on off-grid coal plants used exclusively to power industrial facilities, like nickel and aluminium smelters.

Despite its sustainability commitments and coal restrictions, OCBC remains the largest financier of Indonesian nickel producer Harita Group, which has continued to expand its industrial coal capacity over the last eight years, according to the complaint. Two other Singapore banks, DBS and UOB, have previously also been flagged as Harita’s top lenders.

The three Harita subsidiaries financed by OCBC operate a nickel complex on Indonesia’s Obi Island which is primarily coal-fired. The group currently operates 910 megawatts (MW) of coal-fired captive plants, with an additional 760 MW under construction, and only 40 MW of solar power. Environmental permit approval documents indicate renewables will continue to play a limited role in the complex’s energy mix, with a total planned capacity of 2.54 gigawatts (GW) of coal and 1.3 GW of solar.

OCBC was the first south-east Asian bank to announce it would stop financing new coal plants in 2019. It has also set thresholds under which coal-related power generation capacity or revenue must not exceed 25% and 50% for new and existing clients respectively.

Complaint alleges failure to fully disclose high-carbon exposure

The campaign group argues that by failing to fully and transparently disclose “the true extent of its exposure to high-carbon assets” and the climate-related transition risk this poses to its investors, OCBC risks breaching SGX listing rules requiring the disclosure of material climate-related information.

“Investors need the full picture as they rely on climate and coal phase-out commitments disclosed by banks to assess growing climate-related risk,” said Binbin Mariana, Market Forces’ Asia energy finance campaigner.

“There must be greater transparency from all banks on how financing any companies whose operations rely on coal power plants is aligned with their own policies, global climate goals and the critical transition to clean, reliable and affordable energy.”

OCBC’s chief sustainability officer Mike Ng has maintained that the bank’s disclosures are aligned with SGX’s rules. Additionally, as a signatory to the Equator Principles, a responsible financing framework, the bank’s lending practices are guided by policies to ensure they “do not adversely impact people, communities or the environment”.

Ng said that it is “not pragmatic to expect the production of nickel to be fully powered by renewable energy”, given that hydropower and wind energy are “location-specific and not available everywhere, especially in remote areas in Indonesia” and “solar energy is intermittent.”

“In the absence of reliable renewable energy to fully supply the required power for nickel producers, the energy transition inevitably incurs trade-offs,” he said, adding that Indonesia’s vast nickel reserves are vital for the global electrification of vehicles.

Most of Indonesia’s nickel, however, is still being used in stainless steel, with just 5% of total production going into electric vehicle batteries.

Ng did not clarify whether its financing to Harita is tied to a commitment that its nickel smelters transition away from coal within a fixed time period, which Singapore’s taxonomy requires for captive coal financing to credibly qualify for the transition label.

Mariana clarified that Market Forces has not included DBS and UOB in its complaint as it has been harder to argue they are misleading investors by failing to comply with their own coal exclusion policies, which are more vaguely worded and include exceptions, unlike OCBC’s.

“But it doesn’t mean that DBS and UOB are better, because they are still funding Harita. It actually goes to show that these banks have such huge loopholes in their policies, that it is difficult to even file a complaint.”

Mak Yuen Teen, professor of practice and director of the Centre for Investor Protection at the National University of Singapore Business School, cautioned that scrutiny targeted only at companies with more ambitious standards could risk back-firing.

“While I believe it is important that companies … do not make misleading claims about compliance with their own policies, there is a risk that companies may choose to be more conservative in their own policies or to only adopt policies where they can accurately assess compliance,” he said.

“For example, since scope 3 emissions can be problematic to measure accurately at this point for many companies, especially those with complex supply chains, they may choose not to report until they are mandated to, rather than voluntarily do so.”

“There must therefore also be scrutiny of companies that adopt highly conservative policies,” said Mak.

Shift in public enforcement of climate rules

Globally, breaches in climate-related risk assessments and disclosures are increasingly triggering supervisory measures and complaints.

Last month, the ECB fined its second bank for failing to properly manage financially material climate-related risks.

Meanwhile, Market Forces’ complaint against OCBC marks its second lodged with the Singapore bourse. In 2023, it made a whistleblower complaint against Jera, alleging that the Japanese power giant had not properly disclosed systemic risks over its liquified natural gas investments in a US$300mn bond issued in Singapore.

Another climate advocacy group, Solutions for Our Climate, filed a similar whistleblower complaint with SGX last May, accusing South Korea’s largest power utility firm of failing to disclose material climate-related risks in its $11bn bond issued in early 2025.

To date, SGX has yet to issue any public updates on both complaints. It has also not responded to queries about the most recent complaint.

Mak said the latest case shows that Singapore-listed companies need to reassess the extent of their engagements with civil society groups.

“In Australia [where Market Forces is based], non-governmental organisations and civil society organisations are an important stakeholder group that companies are particularly mindful of engaging with,” said Mak.

A study he co-wrote last year found that, compared to their Australian counterparts, Singapore and Malaysian-listed companies are much less likely to prioritise community relations as a material sustainability-related factor.

“What this latest case shows is that even companies listed in Singapore with no or minimal operations in Australia may become the targets of activist groups because the companies here may have Australian investors,” said Mak. “When companies assess the relative importance of stakeholders and material ESG factors, they need to be mindful of this.”

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