Shareholder activism organisation Just Share has described the ‘Climate Related Financial Disclosures’ report published by Investec in May as having set a new benchmark for South African banks in climate-risk disclosure.
The Just Share analysis has been released ahead of Investec’s August 8 annual general meeting, at which shareholders will vote on a climate resolution that, if approved, will authorise the directors to continue with the group’s commitment to carbon neutrality and to report yearly on progress made on climate-related exposures.
The Investec report, Just Share states, provides shareholders with a clear breakdown of the bank’s fossil-fuel exposure and establishes a “clear benchmark for accelerating the provision of comparable climate risk disclosures in the financial sector”.
“It will also drive demand for a faster progression from disclosure only, to taking action in order to achieve alignment with climate goals.”
The analysis assesses the report’s alignment with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), an international initiative set up to develop consistent climate-related financial risk disclosures for use by companies.
Just Share concludes that Investec has presented the most comprehensive fossil-fuel exposure information of any local bank so far.
The bank reports that its “gross credit and counterparty exposure” to fossil fuels stands at 1.3% and that its energy portfolio includes a total fossil fuels exposure of R8.1-billion and a renewables exposure of R2.8-billion.
“Crucially, Investec correctly categorises natural gas as a fossil fuel and does not try to package its natural gas lending as ‘green or clean’,” Just Share adds.
Nevertheless, the organisation argues that Investec’s climate change report does not fully align with the TCFD recommendations, as it excludes a climate scenario analysis and does not set out any targets for carbon emission metrics.
“However, the report clearly articulates a plan for ongoing improvement in disclosures, and the publication of this first report will also allow stakeholders to track the bank’s progress in meeting its commitments.”