Our Climate Strategy
We are committed to driving Africa’s growth in an inclusive and sustainable manner, supporting a just energy transition.
Our purpose is to drive Africa’s growth. We aim to do this in a sustainable and inclusive way. This means that we strive to have a positive impact through our business on important aspects of Africa’s development like education, infrastructure, financial inclusion and other UN Sustainable Development Goals. It also requires that we reduce the negative impacts of our business on the environment and society. Climate change is an important issue with implications for Africa’s growth. As the largest bank on the continent, we have the opportunity to play a leading role in supporting a just energy transition for Africa.
This climate policy supports our purpose – “Africa is our home, we drive her growth” – and takes the African continent’s environmental, social, and economic context as its starting point.
From our own operations for newly built facilities by 2030; for existing facilities by 2040; from our portfolio of financed emissions by 2050.
Sustainable finance solutions, lending policies, climate targets, innovative ways of engaging with clients and supporting their transitions towards net zero emissions.
Our Climate Targets and CommitmentsOur climate policy takes Africa’s social, economic, and environmental context as its starting point. Commitments and targets have been set for thermal coal, oil, gas, and agriculture, based on their identified levels of elevated climate risk. Over the next two to three years, climate targets and commitments will also be set in additional sectors including insurance, residential and commercial property, and transportation.
We will not finance:
- the deforestation of natural forests and indigenous trees (except where this will have a positive impact, as in the de-bushing of farming blocks for grazing and cropping);
- the production of or trade in other non-indigenous forestry products except from sustainably managed forests; and
- unsustainable fishing.
We will encourage sustainable agricultural practices through sustainable loan products that support renewable energy opportunities, climate-smart agriculture, and through digital platforms to assist small-holder farmers.
We will collect data through partnerships with research groups and industry experts to set an emissions reduction target and a portfolio baseline.
We will finance only those gas related projects that produce zero to minimal fugitive emissions or that are committed to reducing the carbon intensity of liquified natural gas (LNG) plants.
We will prioritise finance for constructing gas-fired power plants when:
- providing support services as part of an integrated renewable energy power solution; or
- converting existing coal- or oil-fired power plants as part of a clearly defined decarbonisation plan aligned to net zero by 2050.
In line with our view of gas as a transition fuel, we will limit the financing of standalone gas-fired power plants providing general baseload, mid-merit or peaking power to a cap of 0.75% of total group advances after 2026, from a current level of 0.14%.
We will reduce our exposure to gas by 2045, in line with our commitment to net zero by 2050, while considering the energy security of the markets where we operate.
We will reduce:
- group advances to upstream oil by 5% by 2030; and
- financing to clients generating power mainly from oil, from 0.05% of total group advances in 2021 to 0.03% in 2026 and zero from 2030.
We will not finance:
- companies with unrestricted flaring for new assets, and we will seek from existing companies with flaring, timebound plans to eliminate flaring for existing assets;
- the extraction of tar sands or construction of associated export facilities, exploration and production of tight oil resources, and pipelines transporting a significant volume of tight oil and export terminals supplied by a significant volume of tight oil; and
- constructing new oil-fired power plants or expanding existing generating capacity, unless such plants provide support services as part of an integrated renewable energy power plant.
We will limit our exposure to 0.70% of group loans and advances in 2021 and to 0.50% by 2030.
We will not finance the construction of new coal-fired power plants or the expansion of generating capacity of existing plants.
We will reduce the financing of power sector clients that generate power mainly from coal, from 0.18% of total group advances in 2021 to 0.15% in 2026 and 0.12% from 2030.
We will finance new coal mines only when there is an overall positive environmental impact.
on the achievement of climate targets and commitments annually.
in the Standard Bank Group’s annual reporting suite.
our overall climate policy whenever necessary, and at a minimum of every three years.
Standard Bank Group’s Climate Journey
- Published the group climate policy and priority sector targets
- Updated relevant SBG policies to align with the Climate Policy
- Joined Partnership for Carbon Accounting
- Financials (PCAF) and committed to applying the PCAF methodology over the next three years to measure the financed emissions of our customers
- Engaging with stakeholders on the Just Energy Transition in South Africa to inform group strategy and offering
- Establishing a transitional finance framework
- Launching a learning framework to deepen understanding of climate change impacts and sustainable finance instruments, in partnership with African and International centres of expertise.
- Local Markets ESG & Sustainable Finance Adviser of the Year at the Bonds & Loans Africa Awards.
- Board approved the SBG climate policy and targets for priority sectors
- Established a group ESG risk community of practice to raise awareness of social and environmental risks and impacts across the group and provide a platform for learning and discussion
- Published our second TCFD-aligned report and our first PRB self-assessment report.
- Issued social bonds and a green bond, to support women’s access to affordable housing and to finance renewable energy assets
- Provided 15 sustainable finance loan facilities (use of proceeds and performance-based loans)
- Arranged eight sustainable finance bonds (use of proceeds and sustainability-linked bonds)
- Provided finance for successful bidders in South Africa’s Risk Mitigation Programme (RMIPP) and Renewable Energy IPP Programme (REIPPP)
- Enabled ESG-linked investing through Melville Douglas Global Impact Fund.
- Launched PowerPulse, providing bespoke solutions for solar PV projects, for businesses and residential property owners
- Launched OneFarm Share in South Africa
- Launched the Green Home initiative for Standard Insurance Limited clients.
- Elected to the ICMA Advisory Council, the only African bank represented
- Delivered a climate risk and sustainability masterclass for 40 executive managers across the group, in partnership with SOAS University of London
- Launched the Sustainable Finance quarterly newsletter for clients and partners
- Hosted a Climate Change Africa Conference in partnership SOAS University of London
- Presented and facilitated panel discussions at various forums including the Africa Green Hydrogen Forum, the 3rd Green Hydrogen Webinar and the Africa Energy Indaba.
- First sustainability-linked bond (SLB) in Africa (Netcare)
- First social bond on sustainability segment of the JSE (TUHF)
- First SLB in SA real estate investment trust (REIT) sector (IPF)
- First SLL in the retail sector (Woolworths).
- Outstanding Leadership in Sustainable Bonds, Outstanding Leadership in Green Bonds and Outstanding Leadership in Social Loans at Global Finance Sustainable Finance (regional winners) Awards
- Best Pan-African Green Finance Bank at Emeafinance African Banking Awards.
- Adopted ESG governance framework, recognising ESG as separate risk type within non-financial risk and assigning clear accountability
- Expanded board and management committee mandates to include oversight of ESG risk management
- Integrated SEE metrics and ESG performance into SBG performance metrics
- Developed performance dashboard to measure progress against our SEE strategy
- Developed non-financial metrics for each of our SEE impact areas
- Developed country-led SEE strategies
- Adopted Fossil Fuel Finance Policy
- Published interim TCFD-aligned report
- Participated in the UNEPFI TCFD Pilot Programme Phase III to improve our climate risk management.
- Published Sustainable Bond Framework, aligned with the International Capital Market Association (ICMA) Green Bond Principles (GBP), Social Bond Principles (SBP) and the Sustainability Bond Guidelines
- Issued inaugural USD200 million Green Bond, via private placement with IFC, the first bond issuance under our sustainable bond framework, Africa’s largest green bond and South Africa’s first offshore green bond issuance.
- Issued several pioneering sustainability-linked loans and ESG-performance incentive loans
- Offered ESG investment options through Standard Bank Isle of Man and Standard Bank Jersey, and Melville Douglas discretionary managed responsible portfolios, with a focus on renewable energy and sustainable infrastructure.
- Sponsored the African Energy Journey webinar.
- First SLL in the technology, media and entertainment, and technology sector (TMT) sector (Vodacom)
- First offshore green bond in South Africa (SBSA)
- First SLL in the real estate sector (Equites).
- Best Investment Bank for Sustainable Finance, Global Finance.
- Expanded integration of E&S screening, management and monitoring across business and credit functions (beyond CIB)
- Expanded mandate of client risk committees to include assessment of ESG risks for new and existing client relationships
- Adopted coal-fired power finance and thermal coal mining finance policies
- Tabled first South Africa shareholder resolution on climate risk
- Established Task Force on Climate-Related Financial Disclosures (TCFD) working group.
Launched OneFarm as a pilot in Kasese, Uganda.
- Founding signatory to the UN Principles for Responsible Banking (PRB)
- Co-chair of UNEP FI Banking Board.
- First Green Infrastructure Bond in Nigeria (NSP-SPV PowerCorp Plc.)
- First Green Bond in East Africa (Acorn)
- First sustainability-linked loan (SLL) in Africa (Curro)
- Project Finance Deal of the Year by Bonds, Loans & Sukuk Africa for the Acorn Green Bond
- Local Currency Bond Deal of the Year by Bonds, Loans & Sukuk Africa for the NSP Green Bond.
- Adopted social, economic and environmental (SEE) impact as a strategic value driver. SEE impact areas informed by UN SDGs and directly relevant to our core business
- Strengthened environmental and social (E&S) risk governance standard and policy.
Commitments to 2050
- Proactive engagement with various stakeholders on the Just Energy Transition in South Africa to ensure active participation and overall alignment to develop a roadmap for SBG to capture opportunities and enhance value proposition and offering.
- Establish a transitional finance framework.
- Develop a learning framework to further advance internal understanding of climate change impacts and sustainable finance instruments, in partnership with African centres of expertise.
- Mobilize a cumulate amount of between R250 billion and R300 billion in sustainable finance across all banking products by the end of 2026. The sustainable finance targets include renewable energy financing over the 5-year period (2022 to 2026) and are dependent on taxonomy standardisation as well as how transition finance will be treated.
- Decrease our exposure to fossil fuels in line with our climate policy targets.
- Commit to achieving a just transition towards net zero carbon emissions from our portfolio of financed emissions by 2050.