eBusiness Weekly
Na’ilah Ebrahim
- Standard Bank has been heavily criticised in recent months for its fossil fuel investments and links to controversial crude oil pipeline, EACOP.
- Climate activists and groups are planning to boycott Standard Bank and are calling on others to follow their lead.
- The bank, however, says it is one of the largest investors in renewable energy on the continent.
Climate change activists are planning to launch a boycott against Standard Bank over its continued financing of fossil fuels.
Extinction Rebellion South Africa, The South African Youth Climate Change Coalition, and Fossil Free South Africa have said they plan to close their accounts with the bank and are calling on other people across SA to do the same.
The bank, the largest in Africa by assets, has come under fire in recent months for its links to the controversial East African Crude Oil Pipeline (EACOP) – acting as one of the three key financial advisors for the project.
The 1443km pipeline, stretching between Uganda and Tanzania, is said to produce 34 million metric tonnes of carbon per year, according to an alliance of activists opposed to the project, #StopEACOP.
An economic and social impact study of the project has been completed, but Standard Bank is still yet to decide whether it will finance the pipeline, estimated to require $5 billion in funding.
Activists meanwhile have staged protests outside its headquarters, demanding the bank stop investing in fossil fuels.
But at a briefing this week, Standard Bank said it is one of the largest investors in renewable energy and the largest funder of sustainable finance on the continent.
Standard Bank South Africa chief executive, Lungisa Fuzile, said the bank would contribute between R250 billion and R300 billion in renewable energy investments and sustainable finance commitments until 2026. Among these are renewable energy projects in bid windows five and six of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
However, it has not ruled out investments in oil and gas – which it sees as a transition fuel – and carbon capture technology to reduce emissions output from coal.
The bank still supports just transition efforts. “The baseload electricity of 28GW generated for Eskom comes from coal. The cars we drive still depend on the utilisation of petrol and diesel that comes from fossil fuels. The whole globe has a fundamental problem but we are committed to the just transition [away from coal and fossil fuels],” said Fuzile.
Increasing fossil fuel investments
Malik Dasoo, of Extinction Rebellion Gauteng, told News24 the bank had increased its investment in fossil fuels such as oil and gas despite calls from climate change organisations to slow down such investment.
“Many science journals speak about the 1000/1 climate change rule that says every 1000 tons of carbon released translates into one death. We cannot be technocratic about the just transition, we need to say that any investment into fossil fuels can lead to death,” said Dasoo.
According to an analysis of the bank’s 2022 climate report, shareholder activist group Just Share indicated that the bank increased its exposure to fossil fuels to R119.4 billion in 2022 and its exposure to fossil fuels is 4.5 times higher than renewable energy.
But the same report also noted the growth in exposure to renewables outpaced that of fossil fuels – at 84%.
Senior climate risk analyst at Just Share, Emma Schuster, said: “We are in an urgent energy crisis, and it is important that we hold financial institutions to account. The Paris Agreement recognises that where the finance and economy flows, so financial institutions’ investment in fossil fuels has a huge impact”.
Schuster said that any investment into renewable energy is welcomed. However, there needs to be a concurrent divestment of fossil fuels to reduce carbon emissions.
In response to questions, Standard Bank asserted that its investments in renewable generation have exceeded power generation from fossil fuels by 500%. This excludes total fossil fuel funding relating to upstream oil and gas projects (such as exploration and extraction).
“Our new advances to the upstream oil and gas support our expectations of initially higher short-term movements in exposure but they remain within the threshold. Our climate policy allows for short-term increases in line with our recognition of gas’s role in the transition,” they said in written correspondence.
Standard Bank said a phased approach is needed in African countries that are still reliant on oil and gas – to shift from fossil fuels to renewable energy, and ensure a just transition.
*This article was amended at 09:40 on 9 October 2023 to reference Malik Dasoo as a representative from Extinction Rebellion Gauteng.
