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 published on Thursday.
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.
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.