StanChart to Face Shareholder Resolution on Reaching Net Zero

(Bloomberg) -- Standard Chartered Plc shareholders will vote next year on whether the bank is doing enough to deliver on its commitment to reach net-zero emissions across its operations and lending activities.

Australian nonprofit Market Forces and U.K. charity Friends Provident Foundation co-filed a resolution requesting that Standard Chartered “match its net-zero rhetoric with action” and end its “misaligned financing of fossil fuels.” They asked the bank to manage its fossil-fuel exposure “in accordance with a scenario in which global emissions reach net zero by 2050” and commit to no longer provide financing for new or expanding fossil-fuel projects in line with the International Energy Agency’s recommendations. They also want the bank to develop short-, medium- and long-term targets to reduce fossil-fuel exposure and report annually on its progress. 

Standard Chartered isn’t the biggest funder of fossil fuels, as London-based rivals Barclays Plc and HSBC Holdings Plc provide considerably more financing to the sector, yet its financial support for companies that are perpetuating climate damage and failing to prepare for a low-carbon future has attracted criticism. Banks and asset managers of all stripes are under increasing pressure to match their statements on sustainability with concrete actions as regulators scrutinize greenwashing and world leaders prepare to ramp up climate ambitions in advance of a United Nations conference starting this month.

“If you’re funding companies that are completely misaligned with where we are supposed to be going on global temperatures, then that’s the true acid test of your climate commitments,’’ said Adam McGibbon, U.K. Campaign Lead at Market Forces. “We have no confidence at all that Standard Chartered will be anywhere close to where the science demands unless pushed, and this is all the more necessary given how incredibly influential they are in Asia.”

While Standard Chartered has pledged to reach net-zero carbon emissions from its operations by 2030 and from its financing by 2050, Market Forces contends the bank “is aligning its investment practices and policies with the failure of these goals, exposing itself and its shareholders to unnecessary and unacceptable financial, reputational, policy and legal risks.”  

A spokesman for the bank said Standard Chartered has “made major strides” in its coal policy and continues to review its positions in light of stakeholder feedback. The company intends “to remain leaders in articulating a path to net zero by 2050.” The bank also plans to put its transition strategy and plan to a shareholder advisory vote in 2022, he said.

Standard Chartered won’t provide financial services directly for new coal-fired power plants or any expansions or retrofits of existing plants, the spokesman said.

Earlier this year Market Forces coordinated a shareholder resolution requesting Barclays bring its financing for coal, oil and gas companies in line with the goals of the Paris climate agreement. The proposal was rejected, with only 14% of shareholders supporting the idea at the bank’s annual general meeting in May.

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