Standard Bank, Africa’s biggest lender by assets, has bowed to pressure from sections of its investors to commit to publishing both the strategy and the targets of its fossil fuel funding reduction programme, as part of its 2021 reporting to shareholders.
The bank, which currently has more than R67 billion or 4 percent of total commitment to sectors like oil, gas and coal as part of its portfolio, confirmed in a statement yesterday that some of its shareholders had pressured it to table a non-binding vote at its annual general meeting this month.
The bank’s strategy would set targets to reduce its exposure to fossil fuels on a time line aligned with the goals of the Paris climate agreement.
“We’re deeply committed to supporting inclusive and sustainable development,” chief executive Sim Tshabalala said in a statement.
The bank’s declaration comes after asset manager shareholders in Standard Bank, Aeon Investment Management, Abax Investments, Visio Fund Management and shareholder activist organisation Just Share earlier this month filed a non-binding advisory shareholder resolution to publish the targets in its results in December 2021, “in order to promote the … sustainability of the company, taking into account the significant risks and opportunities associated with climate change”, the shareholders said.
Tshabalala told the media yesterday he could not say for sure whether a date for the bank’s exit from fossil fuels would be given as it was still grappling with when this would be feasible, given that they underpin many African economies. “We’re doing the analysis,” he said, adding that he could not say until this was complete. “If we put a date … it would have to be a date that’s got credibility and integrity.”
Climate campaigners have been pressuring the bank to curb its financing to such sectors, but so far it has stopped short of ending financing for even new coal-fired power plants, putting it out of step with some of its peers.
Tracy Davies, executive director of Just Share, said shareholders were encouraged by the bank’s commitment.
The advocacy group is roundly critical of the pace at which banks are phasing out fossil fuel funding, arguing that the sector must rapidly limit its exposure, scale up and direct financing assets and investments necessary for transitioning to low carbon, resilient and sustainable economies.