Why is Standard Bank still funding coal? Questions shareholders should ask at the bank’s AGM on 24 May 2018
22 May 2018 at 4:45 pm
Standard Bank continues to finance coal projects, despite its public commitments to tackling climate change. At its AGM on Thursday, shareholders should be telling Standard Bank to stop funding coal.
Climate change is arguably the greatest challenge of our time. Currently, 85% of South Africa’s electricity comes from coal – the single biggest contributor to our greenhouse gas emissions. There is no doubt that South Africa must urgently transition away from its high dependency on coal in order to reduce our exposure to the impacts of climate change, and to meet our international climate change obligations under the Paris Agreement. The Paris Agreement aims to keep the global temperature rise this century to well below 2°C above pre-industrial levels, and to pursue efforts to limit the temperature increase even further to 1.5°C.
Despite this, many of South Africa’s biggest banks, including Standard Bank, are still planning to finance new coal-fired power stations – power stations that we do not need, that will produce more expensive electricity than renewable energy, and that will emit massive amounts of pollutants and greenhouse gas emissions for decades into the future. In addition to the high cost of coal to the fiscus, polluting emissions from coal power also kill and impair the development of thousands of South Africans every year. This is an egregious violation of human rights, and has to stop.
Despite Standard Bank’s public acknowledgement of the risks posed by climate change, Standard Bank is one of the banks listed as a financier of the Thabametsi and Khanyisa independent power producer (IPP) coal-fired power station projects, planned for Limpopo and Mpumalanga respectively.
Thabametsi and Khanyisa are the two “preferred bidders” in the first (and thus far, only) bidding round of government’s plan to support the construction of a number of privately-owned new coal-fired IPP power stations in South Africa.
Globally, proposed coal projects are being met with increased public opposition, as evidenced by the growing number of climate lawsuits being instituted around the world – many of which have been successful, and others of which have good prospects of success.[1] The Centre for Environmental Rights and its civil society and community partners will continue to challenge irrational decision-making in the context of South Africa’s future energy plans, including in court.
Banks have a critical role to play in ensuring that our development path does not harm our environment and our people. Many banks around the world are including coal-fired power stations in their exclusion lists (i.e. listing coal-fired power stations amongst the types of projects that the bank will not finance). It is time that South African banks did the same.[2]
Shareholders need to ask questions about whether, and why, their money is being used to accelerate and intensify the effects of climate change. Shareholders are urged to attend Standard Bank’s AGM on 24 May 2018, and to ask questions about the bank’s commitments to financing new coal, notwithstanding its climate change and other negative impacts.
[1] See ‘Climate Justice: The International Momentum Toward Climate Litigation’, Boom, Richards and Leonard. Available at https://www.boell.de/sites/default/files/report-climate-justice-2016.pdf. See also https://www.csmonitor.com/Environment/Inhabit/2017/0329/Courts-now-at-front-line-in-battles-over-climate-change.
[2] Nedbank’s 2017 Sustainability Report contains an important new commitment from the bank, effective as of 2018, ‘not to provide project financing (…) to develop a new coal-fired power plant, regardless of country or technology.’ This undertaking makes Nedbank the first commercial bank from the global South to have moved away from coal power financing, and sees the bank join the ranks of 15 western banks which have to date adopted similar policies since October 2015. However, Nedbank’s decision has an important caveat – it excludes its existing commitments to round 1 of South Africa’s coal baseload procurement programme, i.e. Thabametsi and Khanyisa.
ENDS
For media enquiries and comment, please contact:
CER Attorney, Christine Reddell, on [email protected], or
CER Communications Manager, Annette Gibbs on 082 467 1295 or [email protected].