Business & Industry Climate Change

Absa puts climate change on the agenda

Absa Group chair Wendy Lucas-Bull. Picture: SUPPLIED

Absa Group chair Wendy Lucas-Bull. Picture: SUPPLIED

Absa will become SA’s first bank to voluntarily develop a comprehensive policy on climate change.

This follows the historic tabling of a climate-change risk resolution at Standard Bank’s AGM last week and is another sign the issue is likely going to dominate agendas in company boardrooms in the future.

“We are very concerned about the reality of climate change, its dire effects for the world as a whole and our continent in particular. We recognise the urgent need for steps to be taken in order to prioritise sustainability to ensure a future for our people and planet,”  Absa chair Wendy Lucas-Bull said in her prepared speech at the group’s AGM in Johannesburg on Tuesday.

Lucas-Bull said the  issue is also becoming a feature of discussions with large institutional shareholders, particularly European investors, who are putting it on the agenda with executive teams and boards they invest in.

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She announced the group’s intention to begin investing substantial resources in understanding climate change. To this end the group has already commissioned a comprehensive research project on the subject in addition to ongoing discussions with climate experts.

“It’s a very difficult issue to navigate and we realise we exert a significant influence on who and what we fund, as well as how we partner and advocate with various governments. We want a significant fact base we can use to start a robust national conversation about the issue,” says Lucas-Bull.

This would ultimately result in Absa developing policies that would help the continental banking giant decide how it would employ its R1.2-trillion balance sheet to finance activities that could positively contribute to, or mitigate against, climate change.

Tracey Davies, executive director of Just Share, a responsible investment and shareholder activism NGO, said on Tuesday it was  commendable that Absa was being proactive about the issue.

“It’s encouraging that it has been raised by the chairperson of the board in such a manner. It’s also commendable that they intend to develop clear, publicly disclosed policies on fossil fuel financing. We urge them to move quickly, as events like Cyclone Idai are going to become more common as sub-Saharan temperatures continue to rise faster than the global average,” says Davies.

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Lucas-Bull also stressed the precarious situation Africa finds itself in with respect to rising temperatures, by pointing to established science that estimates that sub-Saharan Africa’s temperatures are rising more than twice as quickly as the world average. “This means the impact of climate change on Africa is going to be much greater than in the rest of the world.”

Standard Bank shareholders last week voted down a resolution that would have required it to report climate risk in its activities, though they passed another ordering it to disclose its coal financing policies. The bank had advised investors not to back the proposal.

It was the first time a South African company had tabled a resolution on climate-related issues, according to Davies, who supported the motion. A total 38% of shareholders supported the resolution to report climate risk in its activities, which was more than expected and indicated there could be increasing support for motions like this in future.

thompsonw@businesslive.co.za

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