Standard Bank releases funding policy on coal projects
JOHANNESBURG - Standard Bank Group Ltd., Africa’s biggest bank by assets, has become the first South African lender to release its policy toward funding of thermal coal mining and power projects.
The policy comes as pressure mounts on financial institutions to cut lending to fossil fuel projects because of the carbon emissions they generate, contributing to global warming. South Africa relies on coal for almost all of its electricity and exports it to countries including China and India. Its carbon emissions rival those of the U.K., an economy eight times its size.
Standard says it will evaluate projects on a case-by-case basis, assessing the need for power in the country where the mine or power plant is situated and will ensure compliance with environmental and social laws. The bank won’t finance so-called mountain-top removal mining.
“Standard Bank and its climate-conscious investors have set an encouraging precedent,” said Tracey Davies, director of Cape Town-based shareholder activist organization Just Share, in a statement. “We are now looking to accelerate the pace at which banks and other institutions disclose and manage climate-change risks.”
Of South Africa’s five biggest banks, only Nedbank Group Ltd. discloses the amount of money it has lent to fossil fuel projects.
Standard Bank yesterday reported flat earnings for the year to end December, dragged down by losses of $248 million (R3.8 billion) at its struggling London-based joint venture with Industrial and Commercial Bank of China (ICBC) and a sluggish economy in the country.
Standard Bank said ICBC Standard (ICBCS) reported a $248m loss during the period, with a single client costing its $198m while restructuring costs rising $30m and operations $20m.
BLOOMBERG - Additional reporting by Business Report.