ADVERTISEMENT

Standard Chartered Plans to Cut Support for Worst Polluters

Standard Chartered Pledges to Cut Support for Worst Polluters

Standard Chartered Plc said it will remove or help transform its most polluting customers by the end of the decade under plans to make its loan book net-zero by 2050. 

The London-based bank, which has faced calls from some shareholders to match its green pledges with action, said Thursday it aims to reduce the coal-mining emissions it funds by 85% by 2030, and will only provide services to clients who depend on thermal coal for less than 5% of their revenue by that date. 

Standard Chartered, which caters mostly to emerging markets and Asia, also aims to facilitate $300 billion of funding to ensure firms become greener and “tackle financial barriers to the transition,” Chief Executive Officer Bill Winters said. Some of this will be through the bank’s own lending. 

The announcement comes ahead of next week’s COP26 international meeting on reducing catastrophic climate change. Banks are facing growing pressure from climate activists to stop lending to companies that show no intention of transforming their operations to be compatible with global agreements to slow rising temperatures. HSBC Holdings Plc has said that it will phase out funding for coal-fired power and thermal coal mining in the wealthiest nations by 2030 and globally by 2040.

Australian nonprofit Market Forces said Thursday’s proposal meant StanChart “can still fund diversified companies with significant coal interests.” Last month, it co-filed a shareholder resolution requesting that the bank commit to stop financing new or expanding fossil-fuel projects in line with the International Energy Agency’s recommendations. 

Customers in polluting industries will have to cut their emissions, Standard Chartered said. It wants to reduce carbon intensity by 63% for every dollar generated by power companies, 33% for steel and mining firms and 30% for oil and gas clients. By the end of 2022, it wants all clients in these sectors to have a clear plan to transition to less polluting methods in line with the Paris Agreement on climate change. 

Winters said at a conference in Riyadh this week there’s a “huge gap” to close between rich and poorer nations when it comes to paying for greener economies. Developed economies can see 60% to 70% of the funds needed, compared to less than 10% in Sub-Saharan Africa, he said. 

He’s also said “it’s just not practical” to expect banks to stop financing the fossil-fuel industry, in part because to do so would undermine transition efforts, particularly in emerging markets.

©2021 Bloomberg L.P.