Standard Bank aims for net zero by 2050, campaigners demand more

  • Banks under pressure to cut fossil fuel financing
  • The standard sets targets to reduce fossil fuel lending
  • Campaigners say bank needs targets to cut emissions

JOHANNESBURG, March 16 (Reuters) – Leading African lender Standard Bank (SBKJ.J) has ruled out funding for all new coal-fired power plants and most oil-fired power plants as part of plans to achieve net zero emissions by 2050, but campaigners said it could still do more to cut emissions.

More and more financial services firms are setting net-zero targets to fight global warming, but are under pressure to provide more details on how to achieve them, including making short-term cuts.

Standard Bank, one of Africa’s leading oil and gas lenders, has come under fire from activists in the past. They said its new fossil fuel strategy, released on Wednesday, did not guarantee emissions reductions or rule out supporting projects such as a planned Ugandan oil pipeline.

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Under its new strategy, the bank prohibits the financing of new coal-fired power plants, which it has not financed since 2009, and the expansion of existing plants. New mines would be possible in limited circumstances.

New oil-fired power plants or expansion plans would also only be possible in limited circumstances and it would reduce lending for oil exploration and production by 5% by 2030, the bank said.

He said his exposure to gas would increase to 0.91% of his loan portfolio by 2030, before falling to 0.4% by mid-century, saying gas was a transition fuel because it emits less carbon than oil or coal.

Chief Executive Sim Tshabalala said Africa needed to grow its economies, ensure reliable power supply and reduce poverty.

“A total or immediate ban on new transitional projects in Africa to help reduce environmental pressure in much richer regions would be too expensive,” he said.

But campaigners say continuing to fund fossil fuels, including gas, will harm developing countries by driving climate change and making them more dependent on fossil fuels.

Standard Bank has said it wants to mobilize up to 300 billion rand ($19.9 billion) in sustainable finance – potentially including for transition fuels like gas – by the end of 2026, compared to a target of 40 billion rand in 2022.

It has set targets to reduce coal, oil and gas loans as a percentage of its loan portfolio by 2050, and its strategy has put it ahead of some local peers.

But Standard Bank has not guaranteed an absolute reduction in its funded issuance, unlike global peers such as HSBC (HSBA.L) and UBS (UBSG.S), so lending in this area could increase if its loan portfolio was growing. Read more

Maaike Beenes, an activist with BankTrack, which tracks banks’ funding activities, said the lack of short-term issuance targets and other caveats meant Standard Bank’s policy was even lower. to some local rivals.

“It makes it even more disappointing that Standard Bank appears to have missed the opportunity to become a climate leader with the policy announced today.”

($1 = R15.0762)

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Reporting by Emma Rumney; Editing by Sherry Jacob-Phillips

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