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Standard Bank to put climate resolution to its shareholders in May

ACCORDING to Just Share, the non-binding, advisory resolution requests that Standard Bank, over a three-year time frame, provides shareholders with increasingly detailed information about its financed emissions from oil and gas. | Karen Sandison, ANA.

ACCORDING to Just Share, the non-binding, advisory resolution requests that Standard Bank, over a three-year time frame, provides shareholders with increasingly detailed information about its financed emissions from oil and gas. | Karen Sandison, ANA.

Published Apr 28, 2022

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NON-PROFIT organisation Just Share and Aeon Investment management said, on Tuesday, following extensive engagement with Standard Bank, they agreed on the wording of a shareholder-proposed resolution that has been tabled for voting ahead of the bank’s May annual general meeting (AGM).

According to Just Share, the non-binding, advisory resolution requests that Standard Bank, over a three-year time frame, provides shareholders with increasingly detailed information about its financed emissions from oil and gas.

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“Financed emissions are the greenhouse gas (GHG) emissions that banks and investors finance through their loans and investments. Climate science demonstrates that keeping the global average temperature increase to 1.5°C is essential to limit the worst impacts of global heating,” Just Share said.

This follows the pressure that companies around the world have been put under to help reduce global GHG emissions by half by 2030 and aim to achieve “net-zero” emissions by 2050, which means releasing no more carbon into the atmosphere than is removed. Investors and investment vehicles are placing increasingly strict conditions on companies regarding sustainability and governance.

Just Share said the resolution also requests that Standard Bank, by March 31, 2025, updates its March 2022 Climate Policy to include short, medium, and long-term targets for reducing these financed emissions on a timeline aligned with the Paris Agreement goal of limiting the global temperature increase to 1.5 degrees Celsius above pre-industrial levels.

Just Share said after analysing the Climate Policy, that is when the decision was made to file the shareholder resolution.

“In relation to long-term targets, the Climate Policy does not envisage any reduction in absolute financed emissions from oil and gas until 2040 at the earliest,” Just Share.

The non-profit said, instead, the Climate Policy allowed Standard Bank to increase its financing of fossil fuels until 2040.

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“The non-binding advisory resolution, as agreed by the co-filers and Standard Bank, was published in the bank’s March 31, 2022 Notice of AGM. However, the explanatory note to the resolution was not agreed between the parties and had not been seen by the co-filers before the publication of the Notice of AGM,” Just Share said.

The non-profit shareholder activism organisation said the bank’s explanatory note confirmed that it has agreed on the wording of the resolution with the co-filers but goes on to state that “(i)n terms of South African law, shareholders cannot propose a shareholder resolution which binds the board of the company even if the resolution is passed by shareholders nor are there any requirements of South African law, as there are in certain other jurisdictions, for a company to put a non-binding advisory opinion to its shareholders on request or demand.

"Despite this, the Board has, in the interests of shareholder engagement and exploring shareholder views, resolved to put the above resolutions to the shareholder activism organisation said.

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This view was erroneously expressed by Standard Bank in a manner designed to convey the impression that this is a definitive statement of the law, Just Share said.

The co-filers expressed their disappointment in the contents of the explanatory note and asked Standard Bank to republish the Notice of AGM without this explanatory note, and instead to provide context for the filing of the resolution, as included in the formally filed resolution, the shareholder activism organisation said.

"Shareholders should be particularly concerned about Standard Bank’s plans to increase its financing to oil and gas, and its continued assertions, in the face of a significant and growing body of evidence to the contrary, that fossil fuels “will likely remain key to ensuring energy security in many African regions," Just Share said.

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