Climate change resolution gets support at South Africa’s Standard Bank

Africa’s biggest lender is 20% owned by China banking giant ICBC

South Africa’s first ever climate change resolution has been partially passed at Standard Bank today.

A resolution calling on the bank – Africa’s biggest lender by assets – to adopt and publicly disclose a coal power and mining lending policy was passed at the company’s annual meeting today in Johannesburg, receiving the support of 55% of shareholders, according to non-profit group Just Share.

The other part of the resolution calling on the banking group to assess and report on its greenhouse gas emission by November 2019 was supported by 38% of the vote but fell short of the 50% needed to pass.

Both “ordinary” resolutions were filed by The Raith Foundation and South African activist investor Theo Botha, with support from Just Share.

Proxy advisor Glass Lewis recommended a vote “against” the resolution on coal lending and a vote “for” resolution on greenhouse gas emissions reporting.

But Institutional Shareholder Services advised a vote in favour of the coal lending motion and against the emission reporting one.

Standard Bank, which opposed both resolutions, nonetheless, allowed them to put to shareholders – a decision that was praised by Tracey Davies, executive director of Just Share.

This contrasts with country’s oil and gas giant Sasol, which last year reportedly refused to table a climate risk resolution after commissioning a legal opinion on the matter. The company refused to share that opinion with the proponents.Standard Bank opposed both resolutions on the grounds that they would not provide “shareholders with any more meaningful understanding of the company’s climate change risk exposure and risk management”.

It also pointed to its role as chair and “early adopter” of the Equator Principles as proof of its leadership on ESG issues.

Standard Bank, however, is also one of the lead arrangers for a 1,443Km oil pipeline under construction in Uganda and Tanzania, according to campaign group BankTrack.

The climate impact of the pipeline, which is expected to carry 216,000 barrels of crude oil daily, is to be 33m tonnes in CO2 emissions each year, significantly greater than the combined emissions of Uganda and Tanzania.

Ahead of the Standard Bank AGM, Cape Town-based Mergence Investment Managers said it would support both parts of the resolution:

“While the notice of the Standard Bank Annual General Meeting states that the climate-risk-related resolution was proposed by “shareholders holding less than 0.001% of the company’s issued ordinary share capital”, it addresses an issue that affects 100% of Standard Bank’s shareholders.”

RI understands that other local players like Old Mutual and Aeon Asset Management also intended to support the resolutions.

Standard Bank’s two largest shareholders are Industrial and Commercial Bank of China, which has a 20.1% stake, and the Government Employees Pension Fund (12.3%).