Fouled: Climate activist group Extinction Rebellion protest on March 12 in Johannesburg against Standard Bank’s financing of a pipeline in Tanzania and Uganda. Photo: Elizabeth Sejake/Rapport/Gallo Images
Standard Bank has issued a formal response to shareholders declining to table a resolution on climate change ahead of the bank’s annual general meeting on 27 May.
The back and forth between the nonprofit shareholder activism organisation, Just Share, and Standard Bank began last year when the organisation asked the bank to recuse directors with direct and indirect links to the fossil fuel industry after the first climate resolution was turned down.
Standard Bank dismissed the alleged conflicts of interest when, last year, the same group of shareholders pointed out that seven of the banks’ 18 board members were conflicted on climate change-related matters because of their ties to the fossil fuel industry.
“In all instances, a director’s conflict of interests is governed by the Companies Act and arises in instances where the board has to take a decision in respect of a company a director may have an interest in,” the bank said in response at the time.
Standard Bank was flagged in an analysis of climate-conflicted directors of the world’s biggest banks last month. It found that 82% of the bank’s current board members have past and or present connections to industries that could render them climate-conflicted.
On 23 April this year, Just Share, Aeon Investment Management, Abax Investments and Visio Fund Management filed another nonbinding advisory shareholder resolution.
In its latest response to the shareholders Standard Bank said it is “already committed to publishing, either in its reporting to shareholders for the year ending 31 December 2021 or within a reasonable period after that, a strategy and targets to reduce its exposure to fossil fuel assets on a time line aligned with the Paris [Agreement] goals”.
As a result, the bank argues, the resolution was not necessary and would not be tabled. Instead, it would meet the shareholders to consult on the matter at a date to be confirmed.
The bank added that it has already developed a comprehensive environmental and social policy frameworks, which ensure that it proactively identifies, manages, monitors and embeds environmental and social risk management in its lending practices.
In response to questions sent by Mail & Guardian on Monday, Standard Bank said the shareholders tabled the resolution on Friday, 23 April 2021, almost a month after the group had published its annual general meeting (AGM) notice.
But in an earlier statement, Just Share said the resolution was filed 23 working days before the meeting.
“The Johannesburg Stock Exchange listing requirements only require 15 working days’ notice for ordinary resolutions.
“The co-filers would have liked to provide Standard Bank with more time to consider the resolution, but this was not possible as there had been no indication, before the bank’s 31 March notice of AGM, that the AGM would be scheduled for 27 May. Previous indications were that the AGM would be held on 29 June,” Just Share said.
The resolution acknowledges that Standard Bank has taken steps to recognise the material financial risks posed by climate change and improve its disclosure of those risks. This included the bank’s directors filing their own climate change resolution in 2019.
The bank said it was working to understand better and manage its exposure. Last year the company also released its fossil fuels financing policy.
The latest resolution from the shareholders concludes that none of Standard Bank’s disclosures provide measurable commitments that show how and when it will implement the alignment of its portfolio with the Paris global climate accord, which seeks to limit global warming through collective action to reduce greenhouse gas.
Meanwhile, activists have lauded Nedbank for its new policies on energy and climate change target of zero fossil fuel exposure by 2045.
The policies outline that without urgent, unprecedented action and cooperation from all stakeholders, prospects for economic development, political stability and societal wellbeing are expected to deteriorate in Africa.
Among other policy adjustments, Nedbank aims to cut funding to coal-fired power initiatives, exclude financing of thermal coal mines outside South Africa, exclude direct funding for new oil exploration projects and direct funding for any new gas exploration projects before 2045.
Last year, Absa investors approved a nonbinding resolution to disclose its exposure to climate risks in its lending portfolio in 2021.
Tunicia Phillips is an Adamela Trust climate and economic justice reporting fellow, funded by the Open Society Foundation for South Africa
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