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Standard Bank lending to fossil fuel industries stands at $4 bln

STANDARD Bank, Africa’s largest lender by assets, has 67.4 billion rand ($4 billion) in loans and commitments to the coal, oil and gas sectors on its books, according to a climate exposure report it has published.

Climate campaigners have criticised the bank for both its lending policies and involvement in particular projects such as a blockbuster natural gas development in Mozambique, and its potential financing of a Ugandan oil pipeline.

The bank’s climate-related financial exposures report gives the fullest picture yet of its lending to fossil fuel industries. It showed those sectors accounted for about 4% of all its lending and commitments as of Dec. 31, 2019, while its exposure to renewables was 0.8% or 12.31 billion rand.

Wendy Dobson, head of group corporate citizenship in group risk at the bank, said it recognised that climate change posed a material risk to generating value for stakeholders, and its aim of “safeguarding African societies, environments and economies”.


“We have also undertaken a preliminary assessment of higher carbon-emitting sectors in our portfolio,” Dobson said. “Where we have significant exposure, we will develop short- and medium-term actions to manage this risk.”

The bank’s report outlined lending on its balance sheet as well as off-balance sheet commitments to various sectors within fossil fuel industries but did not include other exposures such as in its trading books or equity investments.

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Standard Bank said it’s initial assessment indicated that higher carbon-emitting activities, such as power utilities that own and operate coal-fired power plants, accounted for 1.84% of its total lending and lending commitments.

Credit or commitments to borrowers owning and operating extractive coal assets accounted for 0.35%.

For oil and gas, it’s largest exposure was to trading and retail at 1.53%. Exposures to exploration and production, mid-stream – which covers activities like storage and processing – and integrated oil and gas companies – stood at 0.76%, 0.71% and 0.78% respectively. – Thomson Reuters Foundation.

By The African Mirror