- Standard Bank says it will adopt a climate strategy.
- The strategy will also set targets to reduce the bank's exposure to fossil fuel assets.
- These will be published in the next annual reporting cycle, in the first half of 2022.
Standard Bank has committed itself to publish a climate strategy in the next Task Force on Climate-related Financial Disclosures Report (TCFD).
The bank, which is the largest lender in the continent, has been receiving backlash from environmental activists for several years now regarding its decisions to finance or advise on the transactions of fossil fuel projects.
At the company's annual general meeting on Thursday, climate-related issues dominated the conversation - as has been the case in the previous two years.
In a statement read by the board chairperson, Thulani Gcabashe, at the beginning of the AGM, Standard Bank said it met with several shareholders, including shareholder activist organisation Just Share NPC and a few asset management companies.
These shareholders wanted the bank to commit that it will set and publish a strategy and targets to reduce its exposure to fossil fuel assets on a timeline aligned with the goals of the Paris Agreement in its next annual reporting cycle.
Gcabashe said Standard Bank agreed to publish a climate strategy and short-, medium-, and long-term targets to reduce its exposure to fossil fuel assets. But these will be published in the first half of 2022, given Standard Bank's vast footprint.
"The shareholders recognise that there are significant challenges associated with the setting of meaningful and credible targets across the 20 countries on the African continent in which the group operates," said Gcabashe.
The chairperson said the bank's new climate strategy would detail science-based short-, medium- and long-term climate targets to support the goal of net-zero carbon by 2050. The bank will progressively phase in these targets based on materiality.
"As such, we will start with the material sectors that are reported on in our latest TCFD Report, which are oil and gas, thermal power, coal mining, renewables, and agriculture," said Gcabashe.
He said the bank would annually report on its progress in achieving these targets and regularly review them according to current climate science.
Despite these commitments, the environmental organisations still took Standard Bank to task about its involvement in new oil and gas projects in Africa, including New Largo Coal, the Mozambique LNG Project and the East African Crude Oil Pipeline.
Standard Bank is only an advisor in the East African Crude Oil Pipeline project, but shareholders who alleged that human rights are being abused to get the project going at whatever cost wanted the bank to account for that too.
Standard Bank CEO Sim Tshabalala said the East African Crude Oil Pipeline project sponsors - which include Total SA, China National Offshore Oil Corporation, and the governments of Tanzania and Uganda - have committed that they will strictly comply with all local regulations.
They've also committed to complying with the Equator Principles and the World Bank's environmental, health and safety guidelines.
He said Standard Bank is an advisor on that project and it is based on its compliance with the Equator Principles. He said a new preliminary environmental and social impact report published in March showed no red flags. But the project's climate change impact assessment report is yet to be finalised. A final report is expected soon, but Standard Bank has commissioned its own study, which ENS will conduct.