Standard Chartered recently announced its commitment to combat climate change with real and substantial anti-coal financing policies and even exited three controversial power plant deals.
Standard Chartered Group will «only support clients who actively transition their business to generate less than 10 percent of earnings from thermal coal by 2030», according to a statement. The business will adapt to this commitment on a phased basis beginning on January 1, 2021.
«We are taking bold and ambitious actions in support of the Paris Agreement, being the first bank active in emerging markets to confirm that we will be out of thermal coal by 2030 and set a massively increased target for helping our clients transition into low-carbon technologies,» said Bill Winters, group chief executive of Standard Chartered.
$35 Billion by 2025
The bank announced an increased target to finance $35 billion by 2025 in deals linked with clean technology and renewable with a particular focus on emerging markets.
According to the bank, emerging markets across Asia, Africa and the Middle East not only have an opportunity to «leapfrog to new low-carbon technology» but face insufficient financing, citing the U.N. figure of a $2.5 trillion per year funding gap.
The statement accompanied a release of a «Taskforce on Climate-related Financial Disclosure» (TCFD) report on the bank’s progress with aligning its lending portfolio to Paris Agreement goals of limiting global warming to significantly below two degrees.
Activist Response
Of the moves announced towards supporting renewable energy, the boldest deliverable was the bank’s decision to withdraw from three projects it had said it would finance in September 2018 – assumed to be Vung Ang 2 and Vinh Tan 3 in Vietnam, alongside Java 9 and 10 in Indonesia.
Prior to the withdrawal from the deal, Standard Chartered was lambasted by environmental campaigners that challenged the credibility of the bank’s leadership position in «Equator Principles». A Banktrack executive likened the matter to «putting the fox in charge of the hen house».
«Standard Chartered’s latest move should send a signal to other banks, including DBS, that building coal is financially risky, environmentally and socially unsound and morally reprehensible,» said Bernadette Maheandiran, a legal analyst from Market Forces.
