The Standard Bank Group has committed to achieving net zero carbon emissions from its own operations by 2040 and from its portfolio of financed emissions by 2050, aligned to the Paris Agreement.
It sees promoting sustainable finance both as an ethical obligation and as a significant commercial opportunity. To this end, it is substantially increasing support for the financing of renewable energy and the use of sustainable finance instruments.
The Group will mobilise a cumulative amount of between R250 billion and R300 billion for sustainable finance by the end of 2026. This target includes R50 billion of financing for renewable energy, and underwriting of a further R15 billion for renewable energy by the end of 2024.
As Africa’s largest bank by assets, not only do we feel strongly compelled to act responsibly, but we also understand that we can make a significant positive impact.
“To achieve our purpose to drive Africa’s growth, our core business activities are being directed towards solving Africa’s development challenges and maximising opportunities for sustainable and inclusive growth, while also managing the risks posed by climate change,” says Sim Tshabalala, Chief Executive of Standard Bank Group.
Standard Bank notes that Africa has not made a significant contribution to global warming, yet Africa will be among the most vulnerable to its negative effects. While Africa must join the global drive towards limiting greenhouse gas emissions, this action must be considered within the context of Africa’s just transition towards a low-carbon economy and in a manner that recognises and addresses the deep energy deficit across African economies. Fewer than 43% of people in sub-Saharan Africa have access to grid electricity.
As the World Bank has recently argued, Africa’s recovery from the pandemic, and its medium-term development both require a degree of openness to further investment in ‘brown’ activities. Standard Bank agrees. Therefore, in certain tightly defined circumstances, the Group will remain open to supporting ‘brown’ energy and mining projects in Africa.
“In our view, a refusal to accept this would amount to denying Africa’s right to sustainable development. Over the past several centuries, Africa has borne very considerable economic and human costs for other regions. A total or immediate ban on further transitional projects in Africa in order to help reduce environmental pressure in much richer regions would be a cost too far,” says Sim Tshabalala.
“Having said that, our long-term goal is clear. The Standard Bank Group will achieve a portfolio mix that is net zero by 2050. That will entail reducing our financed emissions and simultaneously scaling up our financing of renewables, reforestation, climate-smart agriculture, decarbonisation and transition technologies, and supporting the development of credible carbon offset programmes,” adds Tshabalala.
The climate policy takes Africa’s social, economic, and environmental context as its starting point. Commitments and targets have been set for thermal coal, oil, gas, and agriculture, based on their identified levels of elevated climate risk.
Standard Bank will also partner with clients and stakeholders to support their transitions and the national climate commitments of the countries in which the Group conducts business.
Over the next two to three years, climate targets and commitments will also be set in additional sectors including insurance, residential and commercial property, and transportation.
Standard Bank Group’s climate policy can be accessed here.