Fri, 18 Jun 2021

  • Investors want Standard Bank to provide a report detailing its climate change strategy to shareholders for the year ending 31 December 2021.
  • They argue that as a significant lender on the continent, Standard Bank's activities in Africa will influence whether or not the Paris goals are met.
  • Concern is raised that none of the bank's disclosures provide any strategy or measurable targets which include timelines on how the it will align its financing with commitment to the Paris Agreement.

Asset managers with interests in Standard Bank and shareholder activist group, Just Share, have taken the financial institution to task over its climate change commitments ahead of its Annual General Meeting on 27 May.

Aeon Investment Management, Abax Investments, Visio Fund Management and Just Share have filed a non-binding advisory shareholder resolution to the bank requesting that it provides a report detailing its climate change strategy to shareholders for the year ending 31 December 2021.

They want information detailing the bank's short-, medium- and long-term targets aimed at reducing its exposure to fossil fuel assets on a timeline aligned with the goals of the Paris Agreement.

Call for disclosure

Robyn Hugo, director of climate change engagement at Just Share, said that without a strategy and measurable targets, it is impossible for shareholders to evaluate the strength of the bank's commitments to align its lending activities with the Paris Agreement.

"This non-binding resolution simply calls for the bank to disclose whether it has any such strategy and targets," said Hugo, adding that there is no reason why Standard Bank should not already have agreed to table it.

The investors acknowledge that while Standard Bank released its Coal-Fired Power Finance Policy and a Thermal Coal Mining Policy, "none of the bank's disclosures provide any strategy or measurable targets" which include timelines on how it will align its financing with commitment to the Paris Agreement's goals.

"In order to better appraise the long-term investment proposition, investors require more information to understand what steps Standard Bank is taking, if any, to reduce its exposure to fossil fuel assets in the short, medium and long term, on a timeline aligned with the Paris goals."

In a submission to the bank, the investors argue that as a significant lender on the continent, Standard Bank's lending, investing and other activities in Africa "will influence whether or not the Paris goals are met".

Pressure has been mounting against companies and financial institutions to clearly define their climate goals and efforts to limit exposure to carbon-intense investments.

In December, Just Share criticised Standard Bank's policy on fossil fuels financing, saying that the plan does not include any ambitious fuel financing exclusions and is in contradiction with the Paris Agreement.

In May, Nedbank revealed that it would redirect more of its investment towards renewable energy sources and gradually exit from fossil fuels. The bank said it wants to withdraw entirely from fossil fuel extraction activities by 2045.

Source: News24

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