Standard Bank stops funding new coal and oil power plants

JOHANNESBURG, March 16 (Reuters) – Standard Bank (SBKJ.J) will stop financing all new coal and oil-fired power plants in most cases and reduce its exposure to fossil fuels over time as part of a plan to reach net zero by 2050, the South African lender said on Wednesday.

Companies in the financial services sector are increasingly committing to net zero targets as part of their efforts to contain global warming and are under pressure to provide details on the short-term reductions needed to meet the targets. .

Standard Bank, Africa’s biggest asset lender, said it would no longer finance the construction of new coal-fired power plants or the expansion of existing ones. Funding for new coal mines is only allowed “if there is a positive impact on the environment”.

Join now for FREE unlimited access to Reuters.com

Register

The company’s exposure to thermal coal will fall to 0.5% by 2030, from 0.7% of its loan portfolio in 2020, and will reach zero by 2050. Exposures to oil will fall to 0, 53%, compared to 0.65% by the end of the decade, and 0.09% by the end of the decade. 2050. Gas exposures will increase until 2030, before falling to 0.4% by mid-century.

“The group is committed to balancing the risks posed by climate change with the need to support access to reliable energy that supports economic growth and poverty reduction,” the bank said.

Regions such as Africa, where many countries face unequal electricity supplies and massive development challenges, are unlikely to transition to greener economies at the same pace as the world’s richer regions.

Campaigners, however, say continuing to fund fossil fuels locks in global warming emissions for decades and puts global climate goals irrelevant.

The International Energy Agency has said investors should not finance new oil, gas or coal supply projects in order to reach net zero by 2050. Read more

Standard Bank will also end its funding for the construction of new oil-fired power stations or the expansion of the capacity of existing oil-fired power stations, unless these are part of an integrated renewable energy power station.

It will reduce oil exploration and production loans by 5% by 2030 and reduce financing for customers producing electricity primarily from oil to zero by 2030.

The lender expects its exposure to gas to drop from 0.63% of its loan portfolio to 0.91% by 2030, arguing that it has a transition fuel role.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Emma Rumney; Editing by Sherry Jacob-Phillips

Our standards: The Thomson Reuters Trust Principles.

Comments are closed.