Green(back) washing
Slick branding and feel-good statements aside, banks aren’t doing much about the climate crisis.
Kiri Rupiah
South Africa’s economy has long depended on fossil fuel extraction. At the recent Mining Indaba in Cape Town, there was even talk of relabelling coal as a critical mineral, a term generally applied to energy sources important for the transition to renewable energy. South Africa is Africa’s largest polluter. By far. And its polluting industries are supported by the banking sector.
That reality is detailed in the South Africa Banks Climate Accountability Report by Bank.Green. The volunteer-led group tries to educate the public about the environmental impacts of the finance industry and how to bank “greener”. It found that the country’s 13 commercial banks are not doing well.
Absa, FirstRand, Nedbank and Investec all received “good” ratings. Discovery was “okay”. Standard Bank, Sasfin, Grindrod, African Bank and Bidvest had “bad” ratings. Access, Capitec, and Zenith received the “worst” rating.
The assessment covered all local commercial banks in the country but didn’t look into 19 other banking institutions including mutual, cooperative and branches of foreign banks.
Overall, it noted that the banks’ policies for avoiding investments in high emission industries like oil, coal, and gas are weak. Only half had any such policy, and none had strong enough policies to earn points in the rating system. Without strict exclusion policies, banks can continue doling out cash to polluting industries while appearing to take climate action.
Transparency was another issue, with a third of the banks not clearly reporting their financing of fossil fuel or renewable energy projects. Only five of the 13 disclosed their financed emissions, and four set emission reduction targets, but their goals did not include financed emissions, which is a significant part of the problem.
Bank.Green said none of the banks had their climate targets validated by the Science Based Targets initiative, the gold standard for corporate climate goalsetting. That means the banks can set their own targets and score for reaching them.