When you deposit your money in a bank, what happens to it? Most of us assume it sits safely until we need it — but in reality, banks use customer deposits to lend or invest in various sectors. This is where ethical banking comes into play. Unlike traditional banks that may support industries like fossil fuels or weapons manufacturing, socially responsible banks actively avoid financing harmful activities and instead direct funds toward areas like clean energy, sustainable housing, or ethical supply chains.

As sustainability becomes a growing priority in Singapore, more consumers are looking beyond rates and rewards — and towards values. From the rise of ESG investing to MAS-backed green finance initiatives, ethical banking is no longer a fringe concept. It’s quickly becoming mainstream — and consumers play a key role in driving that momentum.

» Check out a summary of how our local banks perform at ESG objectives

A socially responsible bank actively integrates ESG principles into its core operations. This includes how it lends money, who it does business with, and what sectors it supports or avoids. These banks tend to publish transparent sustainability reports, avoid financing controversial industries, and play an active role in driving community-focused and environmentally sound initiatives.

» This also applies to other investments, like our best renewable energy stocks

For example, a socially responsible bank might fund solar energy projects, issue green bonds for affordable housing, or set internal guidelines to screen out companies with poor labour practices. In Singapore, local banks are beginning to step up. With MAS pushing for stronger environmental risk management, banks are responding by adopting ESG frameworks and setting decarbonisation targets.

» Broaden your ESG scope with the best ESG ETFs in Singapore

Sustainability claims are everywhere — but not all of them hold up. That’s where certifications come in. Third-party certifications act as a credibility filter. They verify that a bank is truly implementing sustainable practices rather than just claiming to.

» Get down to basics with our guide to ESG investing 

Certifications help consumers identify which banks are walking the talk and reduce the risk of greenwashing — where companies overstate or misrepresent their environmental impact. In Singapore, MAS has been encouraging financial institutions to enhance disclosure and adopt credible frameworks, which gives consumers a more accurate picture of how their money is being used.

» For a broader look at the ESG landscape, check out the types of ESG investments available

If you want to evaluate how serious a bank is about sustainability, look out for the following certifications and standards:

• Global Reporting Initiative (GRI): Ensures banks disclose ESG risks and impacts transparently

• Task Force on Climate-related Financial Disclosures (TCFD): Focuses on how financial institutions manage climate-related risks

• Science Based Targets initiative (SBTi): Validates a bank’s emissions reduction targets in line with climate science

• CDP (formerly Carbon Disclosure Project): Ranks institutions based on their environmental disclosures and transparency

• Green Bond Principles (ICMA) and Sustainability-Linked Loan Principles (LMA): Ensure integrity in ESG-labelled lending products

These certifications signal a bank’s accountability and offer customers a clearer way to compare institutions.

Singapore is positioning itself as a green finance hub — and local regulators are playing an active role.

Monetary Authority of Singapore (MAS)

MAS has introduced Environmental Risk Management Guidelines and launched a Green Finance Action Plan to push banks to factor climate risk into their governance, strategy, and disclosures.

Singapore Exchange (SGX)

SGX requires listed companies, including banks, to report on sustainability annually. Many adopt international standards like GRI and TCFD in their reports.

Singapore Business Federation (SBF)

SBF helps companies strengthen ESG capabilities through training and guidance, with an emphasis on SMEs.

WWF Singapore

WWF collaborates with financial institutions to improve biodiversity risk management and climate-related disclosures, contributing to more sustainable finance practices.

Singapore Deposit Insurance Corporation (SDIC)

While not directly involved in sustainability, SDIC insures deposits up to $100,000 per bank per individual. This adds an extra layer of protection when evaluating banks, even those focused on ethical banking.

Many banks in Singapore are also aligned with internationally recognised standards:

Global Reporting Initiative (GRI)

This is one of the most widely used sustainability reporting frameworks. DBS and UOB both report using GRI standards.

Task Force on Climate-related Financial Disclosures (TCFD)

OCBC has aligned its reporting and risk governance with TCFD recommendations to manage climate-related exposure.

GRESB

For banks involved in real estate and infrastructure finance, GRESB offers ESG benchmarking on property-related investments.

Science Based Targets initiative (SBTi)

SBTi validates whether a bank’s climate targets are aligned with limiting global warming to 1.5°C.

ISO 14001

This international certification ensures that a bank has a structured environmental management system in place.

It’s worth noting that even banks with strong sustainability commitments may still have some exposure to fossil fuels, mining, or other controversial sectors. Ethical banking doesn’t mean perfection — but progress and transparency.

What matters is whether a bank has a transition strategy, clear climate targets, and a willingness to improve. Consumers should remain discerning: read ESG reports, watch for greenwashing, and look beyond shiny marketing claims.

Socially responsible banking can take many forms in Singapore. Here are three categories to consider:

• Traditional banks with ESG commitments
  These include major banks like DBS, OCBC and UOB, which have launched green finance initiatives and pledged to decarbonise their portfolios.

• Sustainability-focused units within banks
  DBS’s Sustainable and Transition Finance Framework evaluates deals based on ESG alignment and helps businesses shift toward greener practices.

• Digital-first ethical players
  Fintech platforms like Endowus offer ESG-focused investment portfolios and promote responsible investing with transparent reporting.

Each plays a role in shaping a more sustainable financial future — from institutional reform to consumer education.

» More broadly, do you know about the key differences in different bank account types

The table below highlights how our favourite local banks measure up in terms of certifications and sustainability efforts, so you can better understand which institutions are taking meaningful steps toward responsible banking.

Every dollar you deposit is a vote for the kind of world you want to live in. Banks wield enormous influence by choosing which businesses, industries, and projects to finance. By banking with institutions that prioritise ethical practices, you’re indirectly funding innovation, climate solutions, and social equity.

Ethical banking may not offer the flashiest perks, but it gives you something more lasting — the chance to align your financial life with your values and contribute to a more sustainable future.