Standard Bank and Absa were a focus of environmental activist pressure yesterday. Photo: Armand Hough. African News Agency (ANA)
The banks were a focus of environmental activist pressure yesterday with a protest at Standard Bank’s offices on the day of its annual meeting, and the release of a report that questioned Absa’s targets to reduce its exposure to the coal, gas and oil sectors.
Standard Bank, in response to a query from Business Report, confirmed that a small group of people had protested at its Rosebank offices, and the bank welcomed the peaceful exchange of interests and ideas, and would continue to engage with stakeholders on the East African Crude Oil Pipeline (EACOP) project.
Activists and civil society organisations said on Twitter the protest was to highlight the need for Standard Bank to withdraw its support for EACOP due to the threat it poses to the well-being and livelihoods of local communities and the environment.
The activists rather want Standard Bank to redirect its investments to clean energy solutions that prioritise the provision of energy access to communities.
Standard Bank said, however, that it had not yet made a decision on whether to be part of the financing of the pipeline.
Potential lenders, including Standard Bank were relying on the services of an independent environmental and social consultant who had produced a due diligence environmental and social (E&S) report.
“The report is being interrogated by our internal experts,” Standard Bank said.
EACOP is a 1 443km pipeline to transport oil from Uganda to Tanzania, which is expected to cost $3.5 billion (R64.9bn), and be financed by a consortium of banks.
Meanwhile, the shareholder activist organisation Just Share said yesterday, that while Absa on April 30 had reported that it was making progress on setting short, medium and long-term limits for its financing of fossil fuels, its limits now allowed the bank to significantly increase lending to coal and gas.
Absa’s report released on April 30 on its alignment with recommendations of the Task Force on Climate Change-related Financial Disclosures showed its total exposure limit to coal, oil, and gas increased from R18.8bn in 2021 to R23.2bn in 2022, Just Share said.
This, the bank had attributed largely due to an increase in its exposure to oil, due to increased usage of existing facilities and the depreciation of the rand, Just Share said.
“Absa’s exposure to fossil-fuel based electricity, gas and water supply nearly doubled to R13 billion from R7bn in 2021, and no strategy or targets or strategies to reduce this exposure was provided,” the organisation said.
Absa had included “sensitive sector financing limit caps” (SSFLC’s) for coal, oil and gas. However, caps for coal and gas were set significantly higher than Absa’s current exposure allowing it to increase financing to these sectors, while remaining within its targets.
For example, Absa could still more than double its exposure to coal by 2030, while remaining within the boundaries of its SSFLCs.
For coal, current loans were about R547m. By 2030, the caps allowed this to increase to about R1.5bn. In addition, Absa also excluded financing related to coal-fired power generation ie to Eskom from its targets without any explanation for this, Just Share said.
Absa said in response to a query from Business Report that: “Unfortunately, Absa is unable to provide a response within the limited time-frame provided.”
Just Share said Absa had justified its continued financial support of fossil fuels by saying that a move away from carbon-intensive industries would deepen unemployment issues in developing economies and that addressing energy poverty “should be an immediate priority with a transition to cleaner energy” seen as “a complementary priority”.
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