Banks| Policies| Dodgy Deals| Campaigns
About us| Blog| Publications| Successes| Contact us| Donate
About BankTrack
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
History
BankTrack in the media
Our privacy policy
Donate
2023-01-23 00:00:00
Berta Cáceres: new rules for banks could help stop defender killings
2023-01-16 00:00:00
In the balance: Why European due diligence legislation must cover financial services
2022-12-08 00:00:00
Exposed: Western banks funding Qatar’s carbon bombs
2022-12-08 00:00:00
Right-wing attack on sustainable finance is the latest form of climate denial
2022-12-14 11:08:26
HSBC announces it will no longer finance new oil and gas fields
2022-10-13 15:56:39
More major banks and insurers refuse to support EACOP
2022-09-16 10:38:48
European Parliament passes emergency resolution against human rights violations & environmental threats linked to EACOP
2022-06-27 09:49:16
Crédit Agricole takes first step to phase out from the oil and gas sector
Connect
2022-11-22 00:00:00
Banking on Thin Ice: Two years in the heat
2022-11-17 00:00:00
BankTrack Global Human Rights Benchmark 2022
2022-10-21 00:00:00
Burning forests in the name of clean energy? How banks are failing to exclude the harmful wood biomass industry from finance
2022-06-28 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 3
2022-04-05 00:00:00
The BankTrack Human Rights Benchmark Asia
2022-03-30 00:00:00
Banking on Climate Chaos 2022
See all publications
Browse
Home
Banks
Policies
Dodgy Deals
Campaigns
About
About BankTrack
Donate
Contact BankTrack
Publications
Victories
Follow Us
News
BankTrack blog
Facebook
Twitter Fossil Banks No Thanks Twitter Fossil Banks No Thanks Instagram
Affiliate Websites
Fossil Banks No Thanks
StopEACOP
Forests & Finance
Banks & Biodiversity
Drop JBS
Bank of Coal
Don't Buy into Occupation
Home › News
Standard Bank to keep funding fossil fuel expansion in a climate emergency
New climate policy ends finance for some new coal projects, but allows lending for climate disaster projects like EACOP crude oil pipeline
Start
Banks
Dodgy Deals

By: BankTrack & #StopEACOP
2022-03-16
Nairobi, Nijmegen

Contact:

Omar Elmawi, Coordinator, StopEACOP

Maaike Beenes, Campaign Lead Banks and Climate, BankTrack


Share this page:

The Headquarters of Standard Bank. Photo: "Standard Bank Building, Church Square Pretoria" by Paul Saad is marked with CC BY-NC-ND 2.0
Go to:
Start
Related Banks
Related Dodgy Deals

This morning South Africa’s largest bank, Standard Bank, published its new climate policy, after the bank committed, under shareholder pressure last year, to set goals to reduce its fossil fuel exposure. While the new policy does include some steps forward, it will not prevent the bank from financing the East African Crude Oil Pipeline (EACOP) or other projects which will expand the fossil fuel industry in the midst of a climate emergency. 

Standard Bank promised shareholders that it would publish a climate strategy and set targets to reduce its fossil fuel financing after a group of shareholders had tabled a resolution demanding climate action from the bank. However, the new policy fails to set an overall target to zero out fossil fuel financing directly, instead of focusing on reducing financed emissions to net zero by 2050 and cutting “advances” (e.g. lending levels) to specific sectors. This falls far short of the immediate end to finance for fossil fuel extraction that civil society has called for, and ensures the bank continues to lag behind regional competitors such as Nedbank. 

Maaike Beenes, Campaign Lead Banks and Climate for BankTrack, said: “Contrary to its commitment to shareholders of last year, Standard Bank has not set an overall target to reach zero exposure to fossil fuel companies, and its interim targets do not require it to reduce absolute financed emissions. The policy and targets published today are nowhere near aligned with the goals of the Paris Agreement, and instead indicate a willingness to continue financing projects and companies that will damage the climate and the health of people in the communities it is supposed to serve.

The new policy introduces a goal of reaching ‘net zero’ financed emissions by 2050, following the 1.5˚C scenario of the Network for Greening the Financial System (NGFS). This scenario has been criticised for failing to acknowledge the need for a sharp reduction in fossil fuel production and for relying on assumptions that risk significant global warming overshoot. In addition, the bank’s interim targets are weak and will only reduce the bank’s new lending to specific fossil fuel activities relative to its overall lending, rather than targeting an absolute decrease in financed emissions. For example, on upstream oil, the bank commits to a reduction in “group advances” of only 5% by 2030. This allows for lending to new oil extraction projects to continue almost unrestrained. Meanwhile, the IEA has said no new fossil fuel developments should proceed if the world is to succeed in limiting global warming to 1.5˚C.

The new policy will do nothing to prevent Standard Bank from financing EACOP, the planned crude oil pipeline through Uganda and Tanzania for which Standard Bank has been acting as lead financial advisor since 2017. This leaves the bank isolated among its African peers, who have all ruled out financing for the controversial project.

Omar Elmawi, Coordinator of the #StopEACOP coalition, stated, “Standard Bank has failed to pounce on an opportunity to show climate leadership by genuinely taking climate action. What they have opted to do instead is to continue ignoring the imminent danger that is already affecting Africa, and to put the continent on an even more dangerous pathway. By continuing to be involved in EACOP, Standard Bank is not only endangering the whole continent but is also facilitating a project that is mired in human rights violations. Instead of the bank driving Africa’s growth, it seems determined to drive the continent to its destruction.”

New policy expands some restrictions for fossil fuel financing

There are positive moves in the policy, however, these all contain substantial loopholes. Notably, the policy now excludes financing for new or expanded capacity of existing coal-fired power plants. There is also a curious provision for coal mines: financing for new mines will be excluded unless “there is an overall positive environmental impact”. The bank has said this could apply for example to cases where an existing power plant sources its coal from a far-away mine, and opening a new mine close by would reduce emissions from transport. It is hard to imagine how this would be possible in practice. The emissions and other environmental impacts associated with opening a new coal mine to provide feedstock for an existing power plant - especially in circumstances where coal-fired power is neither least-cost nor required for energy security- would clearly outweigh any claimed “positive environmental impact”.

For coal mining and coal power companies, the policy seems to commit only to reducing the percentage of the bank’s total financing. In addition, the policy only applies to companies that derive more than 50% of revenues from coal mining activities, an incredibly high threshold that will mean most companies will be able to avoid exclusions. The policy also does not restrict financing for companies involved in developing or operating coal mines and power plants or to companies that provide services to the coal sector, including construction and operation contractors, traders, and retailers.

Furthermore, the policy says Standard Bank will not finance gas projects, unless they have “zero to minimal fugitive emissions or (...) are committed to reducing the carbon intensity of (...) LNG plants.” Based on the bank’s belief that gas is a transition fuel, it will actually “prioritise finance for constructing gas-fired power plants when (...) converting existing coal- or oil-fired power plants (...).” 

Finally, the policy restricts financing for some oil projects, notably the extraction of tar sands and shale oil or associated export facilities. New oil-fired power plants or the expansion of existing plants are also excluded, but not when they “provide support services as part of an integrated renewable energy power plant”.

Although the concept of a just transition is mentioned several times in the policy, the bank persists with its highly problematic narrative (contradicted by overwhelming evidence) that fossil fuels are required for the development of African economies and for energy access, leading it to continue financing the expansion of the industry, instead of supporting a genuine just transition for communities across the continent.

Go to:
Start
Related Banks
Related Dodgy Deals

Related banks

Standard Bank South Africa

active
Go to:
Start
Related Banks
Related Dodgy Deals

Related Dodgy Deals

Projects

target

East African Crude Oil Pipeline (EACOP) Uganda

Pipeline Transportation of Crude Oil
There are no projects active for this item now.
Browse
Home
Banks
Policies
Dodgy Deals
Campaigns
About
About BankTrack
Donate
Contact BankTrack
Publications
Victories
Follow Us
News
BankTrack blog
Facebook
Twitter Fossil Banks No Thanks Twitter Fossil Banks No Thanks Instagram
Affiliate Websites
Fossil Banks No Thanks
StopEACOP
Forests & Finance
Banks & Biodiversity
Drop JBS
Bank of Coal
Don't Buy into Occupation
Vismarkt 15
6511 VJ Nijmegen
The Netherlands

Tel: +31 24 324 9220
Contact@banktrack.org
©2016 BankTrack                Webdesign by BankTrack and EASYmind
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted