Net zero vs zero ambition - the choice at Standard Chartered AGM
Adam McGibbon UK campaign lead at Market Forces, +44 770 9204 187
Adam McGibbon UK campaign lead at Market Forces, +44 770 9204 187
The Notice of Meeting issued today for Standard Chartered's Annual General Meeting on 4 May contains two competing proposals over the future of the company's climate change action.
Market Forces and Friends Provident Foundation have filed a proposal (Resolution 32 in the Notice) calling for Standard Chartered to align its financing with the goal of net zero by 2050, which the company claims to support, despite continuing to finance companies and projects that expand the scale of the fossil fuel industry.
Standard Chartered, on the other hand, has filed its own proposal (Resolution 31 in the Notice), asking shareholders to endorse its current plans, which Market Forces has demonstrated to fall well short of the goal of net-zero by 2050.
The bank's current policy settings allow it to continue very high levels of fossil financing, including:
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Providing US$ 31.4 billion in finance to fossil fuels between the signing of the Paris Agreement and the end of 2020,
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Increasing funding for companies expanding the scale of the fossil fuel industry by almost 420% from US$ 579 million in 2016 to US$ 3 billion in 2020,
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Providing US$ 3 billion in finance to companies expanding oil and gas in 2021, a 24% increase on its 2016-2019 average.
Market Forces' proposal asks the bank to align with the International Energy Agency (IEA) Net Zero by 2050 scenario (NZE2050), a credible pathway to net zero. In a briefing, the organisation highlighted the gaps between the bank's current actions and what the IEA says needs to be done to meet net zero:
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While the IEA calls for no new coal plants to be built as of 2021, Standard Chartered's is the UK bank with the highest financing for new coal plant developers in Asia (financing US$ 4.7 billion 2018-20),
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While the IEA calls for no new coal mines or mine extensions, Standard Chartered's continues to finance companies like Adani Ports, the Adani Group subsidiary facilitating the highly controversial new Carmichael coal mine in Australia; and Glencore, which is involved in nine proposed new or expansion coal mining projects in Australia. Standard Chartered has also repeatedly financed Adaro Energy, an Indonesian coal giant that is expanding its coal business. The bank's own analysis rates Adaro's business plan as consistent with 5-6°C of global warming, a disastrous 'hothouse Earth' scenario, despite contributing to a loan to Adaro in 2021,
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While the IEA states there can be no new oil and gas fields approved beyond 2021, Standard Chartered has no restriction on lending to new oil and gas projects. In January, the bank was involved in a US$ 10 billion revolving credit facility for Saudi Aramco, the world's single largest corporate carbon emitter, which is expanding its operations and opening new oil and gas fields.
Standard Chartered's shareholder proposal was offered with no update to the bank's climate policy, last updated in October 2021, despite peer banks like HSBC updating their climate policy in recent weeks to include capital markets transactions. This leaves Standard Chartered isolated, as the bank's climate policy excludes capital markets transactions, a major loophole given that half of the bank's 2020 fossil fuel financing was in capital markets, and is therefore exempt from the policy.
Larger banks than Standard Chartered are also forging ahead with bolder climate policies, such as ING Bank, which this month pledged to end all financing of new oil and gas projects.
Standard Chartered's resolution (Resolution 31) would allow it to continue financing the expansion of the fossil fuel sector in direct contravention of the net-zero by 2050 goal it claims to support. The resolution filed by Market Forces and Friends Provident Foundation (Resolution 32) would require the bank to draw a line in the sand just as the science does, and ensure none of its financing enables the expansion of the coal, oil and gas sectors.
Adam McGibbon, UK Campaign Lead at Market Forces, said:
This is the first time since the IEA's net zero by 2050 scenario was released that investors have been given a choice between action that would align financing with this goal, or the continued financing of new fossil fuel projects and the companies pursuing them, undermining both net-zero by 2050 and the Paris climate goals.
Any investor that understands the most basic findings of the IEA's net-zero by 2050 scenario will be insulted by Standard Chartered's proposal that allows it to keep funnelling money into an expanding fossil fuel industry.
The choice for investors is simple - a real net zero plan put forward by Market Forces and the Friends Provident Foundation, or a zero ambition plan put forward by the bank's management.
