‘Standard Bank grilled on fossil fuel funding’ 13 June 2023

Activist shareholders of Standard Bank put its board in the firing line at the company’s annual general meeting (AGM), over the lender’s decision to continue financing oil and gas projects. South Africa’s largest bank by assets held its 54th AGM on Monday, at its Rosebank base in Johannesburg, where its stance on climate policy took centre stage. In defence, its group chairman, Nonkululeko Nyembezi, said the bank will continue to fund gas and oil projects in the short- to medium term, adding that its concern is growth on the African continent. “If we say we drive Africa’s growth, it becomes very difficult to articulate a case for how we get to do that without funding and really concerning ourselves about economic growth,” she explained.

…Among the investors that questioned Standard Bank’s financing to Renergen was the Centre for Environmental Rights’ Leanne Govindsamy, who heads up corporate accountability and transparency at the organisation. Govindsamy queried whether the bank had done due diligence in relation to the project, which she criticised for having negative social and environmental impacts, and further asked whether the bank is risking shareholder value given the potential stranded asset risks related to this project. But in Standard Bank’s view, funding Renergen’s said gas project in Virginia would not be misaligned with the lender’s climate policies.

…“Our financing and our advice in the Eacop transaction is based on a fundamental belief by ourselves, that this is consistent with the strategy of the group, international norms on human rights and is in the interest of our clients and the Ugandan people and the Tanzanian people,” Tshabalala said. Last month, Standard Bank issued an update on its climate policy and said that financing for renewable energy is now 439% greater than finance for non-renewable energy. It channelled R55 billion towards sustainable finance transactions in 2022, exceeding its previously set target of R40 billion for the period. By 2026, the bank’s ambition is to have supported sustainable projects with between R250 billion to R300 billion in financing.