Standard Bank has decided to not table proposed climate change risk resolutions for voting by shareholders at its annual general meeting (AGM) in May, following pressure from nonprofit shareholder activism organisations Just Share and Raith Foundation to do so.
Just Share executive director Tracey Davies believes the bank's climate change resolutions acknowledge the material financial risks posed by climate change and says the bank has improved its disclosure and management of those risks, but that there are still significant gaps in the disclosure.
She adds that there is also a lack of alignment between the bank’s recognition of climate risks and its actions to mitigate these risks.
The co-filers of the resolution had asked Standard Bank to provide them with the legal basis for their view on not tabling their climate change resolutions for shareholder voting.
In addition to requesting an assessment of the bank’s exposure to climate-related risks in its lending, investing and other financial intermediary activities, the resolution requested the adoption and public disclosure of a policy covering the financing of onshore and offshore oil and gas exploration and production; oil and gas pipeline projects; liquefied natural gas terminals; and coal-to-liquids projects.
In response, Standard Bank says Just Share’s proposed resolutions do not meet the requirements of Section 65 of the Companies Act and that the bank is, therefore, not required to table the resolutions at its AGM.
The bank motivates that the proposed resolutions do not relate to matters on which shareholders are entitled to vote.
“The requested resolutions require the bank to adopt a policy relating to lending to carbon-intensive, fossil fuels activities, as well as committing to a hard deadline for enhanced disclosures related to climate risk,” Standard Bank adds.
Standard Bank in a letter addressed to Just Share explains further that the board’s decision not to propose the proposed resolutions does not mean the company is in any way deviating from its environmentally responsible record and path, but rather formulates its own policies and within its own timeframes.
In assuring of its environmental efforts, the bank points out that it has significantly increased its focus on climate risk over the past 12 months. The bank is also developing its climate-related risk approach in alignment with the guidelines of the Task Force on Climate-related Financial Disclosures (TCFD), which will be published before the end of the year.
The bank says it is participating in the United Nations Environment Programme Finance Initiative TCFD pilot programme, while also working with the Banking Association South Africa and the National Business Initiative to enhance the bank’s data on climate risk.
“Standard Bank is working with various stakeholders and clients to ensure our climate-related risk approach is appropriate for our business, our operating environment and the group’s commitment to create positive social, economic and environmental impacts through its core business activities.”
The bank adds that it recognises climate risk as a material risk facing the group and that it is committed to prudent management of the risks arising from climate change, as they relate to the bank’s direct operational footprint and lending activities.
Standard Bank says it will continue to operate as a good environmental citizen and will continue to listen to the views of its stakeholders where appropriate and reasonable to do so.