The chairman of Standard Bank, Nonkululeko Nyembezi, has said that the bank will continue to finance oil and gas projects in the short and medium term. The bank's shareholders and activists have questioned the Board of Directors about the relevance of the financing.
Nyembezi explained that the aim of continuing to finance fossil energy projects is in the commitment to develop the African continent.
"We will not prioritize sustainability at the expense of the development of a poor country," said Nyembezi. He was speaking on Monday (12) in Johannesburg during the 54th Annual General Meeting of South Africa's largest bank.
"If we say that we are boosting Africa's growth, it becomes very difficult to articulate an argument as to how we can do that without funding and without really caring about economic growth," he explained.
The bank has been questioned, for example, about financing gas exploration projects and the fact that these have negative social and environmental impacts.
The bank said that its gas exploration financing projects are in line with the bank's climate policies.
Last month, Standard Bank published an update on its climate policy and stated that funding for renewable energies is now 439% higher than funding for non-renewable energies.
In 2022, Standard Bank channeled 55 billion rand into sustainable financial transactions, exceeding its previously set target of 40 billion rand for the period. By 2026, the bank's ambition is to have supported sustainable projects with funding of between 250 billion and 300 billion rand.
The bank sees gas as a transition fuel, said Kenny Fihla, Executive Director of Standard Bank's Corporate and Investment Banking segment.
"At a high level, it's in line with our [climate] policy," added Fihla.
But Emma Schuster, senior climate risk analyst at the shareholder activist organization Just Share, says that the bank's position on incorporating gas as a transition fuel is "another convenient position that the bank has taken".
"Some of the recent models show that a very small amount of gas may be needed to compensate for some of the shortcomings of renewables," says Schuster, adding that the bank is nevertheless using this fact to allow itself to dive into large gas projects.
Standard Bank's stubborn view that a balance is needed between Africa's development and a just transition is problematic.
"Just transition is about African development - it is not contrary to African development," said Schuster.
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