One of South Africa’s biggest banks, Nedbank, has committed R50 billion ($3.5 billion) to renewables and is adopting a zero fossil fuel lending policy to be fully implemented by 2045. The bank last week released its Energy Policy and its updated Climate Change Position Statement which was well received by climate activists and green economy enthusiasts.
Non-profit shareholder activism and responsible investment organisation, Just Share, weighed in on the developments. “Just Share commends Nedbank for its ambition. We hope that its approach will provide a much-needed impetus to other financial institutions to set meaningful, climate science-based decarbonisation targets and fossil fuel financing exclusions,” said Robyn Hugo, Just Share’s director of climate change engagement.
South Africa’s fifth-largest lender by value has already approved over R37 billion for renewable energy developments. The bank is also expanding it’s financing initiatives for embedded generation projects.
“In addition to the R50bn limits already committed to the South African Renewable Energy Independent Power Producer Procurement Programme, we will further our embedded generation financing to accelerate the transition and accordingly aim to achieve R2bn of financing by 2022,” said Nedbank in a statement released last week.
Zero funding for fossil fuels
Nedbank’s CFO, Mike Davis, told Bloomberg News that Nedbank will have ceased financing new thermal coal mines by 2025. By 2035, the bank will have stopped financing oil and gas exploration and will stop financing oil production.
“As we transition as a country away from coal into renewable energy, the bank sees our policy supporting existing clients, but with a strong steer toward renewable energy,” Davis told Bloomberg News.
Nedbank plans to totally cut its exposure to fossil fuels entirely by 2045. The bank will report annually on progress in achieving its climate-relevant performance targets and update its policies to ensure it reaches its 2045 deadline.
Nedbanks says its new stance on fossil fuel builds on the Nedbank Climate Change Position Statement, which outlines the commitment of the bank, over time, to aligning its business strategy, policies, mandates and incentives with the Paris Agreement.
