In a show of low confidence, 32.37 percent of Standard Bank shareholders voted against the re-election of group chairperson, Thulani Gcabashe, during the company's 52nd annual general meeting (AGM) held virtually yesterday. Picture: Karen Sandison/African News Agency(ANA)
In a show of low confidence, 32.37 percent of Standard Bank shareholders voted against the re-election of group chairperson, Thulani Gcabashe, during the company's 52nd annual general meeting (AGM) held virtually yesterday. Picture: Karen Sandison/African News Agency(ANA)

Standard Bank accelerates new era changes at board level

By Dineo Faku Time of article published May 28, 2021

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JOHANNESBURG - IN a show of low confidence, 32.37 percent of Standard Bank shareholders voted against the re-election of group chairperson, Thulani Gcabashe, during the company's 52nd annual general meeting (AGM) held virtually yesterday.

Gcabashe and Standard Bank have faced pressure from shareholder activism and environmental rights groups who want the group to abandon the funding of projects that are detrimental to the environment in Mozambique, Tanzania and Uganda.

One of the groups, Just Share, believed that reasons for the votes against the Gcabashe were likely to emerge in the coming months when asset managers released their voting rationales and records.

“It will be interesting to see whether this unusually high level of votes against the re-election of a sitting chair is in part a reflection of shareholder dissatisfaction with the bank's handling of climate risk,” said Just Share.

At yesterday's AGM, shareholder and environmental rights activist organisations raised their concerns about the bank's proposed financing of the East African Crude Oil Pipeline (EACOP) which is a 1 445 kilometre pipeline that stretches from Tanzania to Uganda.

The activists argue that the EACOP, if built, threatened the environment, communities, wildlife and the planet. They also highlighted the human rights impacts of the pipeline on affected communities, activist intimidation, and how the International Energy Agency's recently-published Net Zero by 2050 scenario would impact the bank's fossil fuel financing decisions.

The shareholder activists questioned the group about Total's Mozambique Liquefied Natural Gas (LNG) project where Standard Bank is one of the banks providing finance for this project and also the climate competency of the Standard Bank board.

However, Standard Bank chief executive Sim Tshabalala said lenders to the project, including Standard Bank, had ensured that the Mozambique LNG project had adhered to international environmental industry standards, including the Equator principles.

“Lenders ensured that the project design included the technology to minimise greenhouse gas emissions such as zero routine flaring.

“In our view, the role of gas as a transition fuel was definitely a consideration in the lending decision and cannot be excluded from our responses to this question.

“The Mozambique LNG project is crucial to promote coal to gas switching in power generation,” said Tshabalala.

Gcabashe who was appointed as group chairperson at the end of the company's 2015 AGM and is a seasoned executive having served as Eskom chief executive between 2000 and 2007 and previously chairing the MTNZakhele and Imperial Holdings boards.

Gcabashe opened yesterday's AGM with a statement confirming that the bank would publish, with its 2021 reporting to shareholders, a climate strategy and short, medium and longterm targets to reduce its exposure to fossil fuel assets on a timeline aligned with the Paris goals.

This followed last week's meeting between the bank and the co-filers, including Just Share, of a non-binding climate risk-related shareholder resolution, which the bank declined to table earlier this month.

“At the meeting, Standard Bank confirmed its intention to publish a climate strategy in accordance with the request in the resolution, and confirmed that it is not opposed to the filing of non-binding resolutions by shareholders,” Just Share said.

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