Standard Bank mobilising R50Bn for renewables by 2026 and ditching coal

Africa’s largest bank by assets, Standard Bank Group, this week published its new climate policy where it outlined it was mobilising a cumulative amount of between R250 billion and R300 billion for sustainable finance by the end of 2026. This target includes R50 billion of financing for renewable energy, and underwriting of a further R15 billion for renewable energy by the end of 2024.

The financial services giant also announced plans to achieve net zero carbon emissions from its own operations by 2040, and from its portfolio of financed emissions by 2050, to align with the Paris Agreement.

“Standard Bank notes that Africa has not made a significant contribution to global warming, yet Africa will be among the most vulnerable to its negative effects,” said Standard Bank in a statement.

“While Africa must join the global drive towards limiting greenhouse gas emissions, this action must be considered within the context of Africa’s just transition towards a low-carbon economy and in a manner that recognises and addresses the deep energy deficit across African economies. Fewer than 43% of people in sub-Saharan Africa have access to grid electricity,” the statement reads.

Standard Bank says it sees promoting sustainable finance both as an ethical obligation and as a significant commercial opportunity. To this end, the bank is substantially increasing support for the financing of renewable energy and the use of sustainable finance instruments.

“To achieve our purpose to drive Africa’s growth, our core business activities are being directed towards solving Africa’s development challenges and maximising opportunities for sustainable and inclusive growth, while also managing the risks posed by climate change,” says Sim Tshabalala, Chief Executive of Standard Bank Group.

Standard Bank policy on coal

On thermal coal energy, the bank has committed to limit exposure to 0.70% of group loans and advances in 2021, and to 0.50% by 2030. The group stressed that it won’t be financing construction of new coal-fired power plants, and will halt financing expansion of existing coal-fired power plants.

The Standard Bank Group says it’ll only finance new coal mines only when there is an overall positive environmental impact.