Standard Bank Group, Africa\u2019s biggest lender by assets, plans to raise as much as R300 billion ($20 billion) by 2026 to help fund renewable energy projects, even as it remains open to supporting fossil fuels.<\/p>\n
The Johannesburg-based lender pledged to achieve a net zero carbon emissions target in its own operations by 2040 and from its portfolio of financed emissions by 2050, in line with the Paris Agreement, the company said in a statement on Wednesday outlining its climate goals.<\/p>\n
Banks across the world are slowly adjusting their business models after decades spent enabling some of the world\u2019s worst emitters of greenhouse gases. Still, Standard Bank\u2019s pledges are less ambitious when compared with smaller rival Nedbank Group Ltd, which vowed last year not to fund new oil and gas exploration and promised to end support for new thermal-coal mines in 2025.<\/p>\n
\u201cOver the past several centuries, Africa has borne very considerable economic and human costs for other regions,\u201d Standard Bank chief executive officer Sim Tshabalala said in the statement. \u201cA 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.\u201d<\/p>\n
Some of the pledges made by Standard Bank include:<\/p>\n
Standard Bank\u2019s shares rose as much as 4% as of 2:33 p.m. in Johannesburg, heading for the biggest one-day gain since Feb. 15.<\/p>\n
In May last year, a group of investors including Abax Investments Ltd., Aeon Investment Management Ltd and Visio Capital Management Ltd had sought a non-binding resolution that would push the lender to set short-, medium- and long-term goals to reduce its exposure to fossil fuels.<\/p>\n
\u201cWe are disappointed that Standard Bank has not taken this opportunity to introduce much stricter limits on its financing for fossil fuels,\u201d Maaike Beenes, a climate activist at BankTrack, an international organization that tracks financial institutions and their activities, said in an email response.<\/p>\n
The targets \u201cdo not live up to the commitments they have made to their own shareholders last year,\u201d she said.<\/p>\n
Energy Security<\/strong><\/p>\n Bankers and policy makers in Africa want to ensure funding for fossil fuels such as natural gas, which they say is key to the continent\u2019s energy security, isn\u2019t stymied by the focus on climate goals.<\/p>\n \u201cI do think it is balanced,\u201d said Warwick Bam, head of research at Avior Capital Markets Ltd. \u201cWe know we just can\u2019t wean ourselves off oil, and there\u2019s a view that it would be irresponsible to sort of pull the plug on capital to these businesses that whole economies are dependent on.\u201d<\/p>\n In countries including Mozambique and Tanzania, more than $50 billion-worth of gas projects are being discussed with companies including TotalEnergies SE and Equinor ASA. In Kenya, where the national electricity grid is already 90% renewable, authorities are considering converting the remaining fossil-fuel power plants to use liquefied natural gas.<\/p>\n Standard Bank will fund energy and mining projects under \u201ccertain tightly defined circumstances\u201d to achieve a just transition for the continent, it said.<\/p>\n
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