ESGs – environmental, social and governance issues – is a corporate buzz term that has gained a lot of traction in recent years, not least because of growing investor awareness as well as shareholder activism. Climate change and efforts to cut carbon emissions linked to global warming have been a central focus of such efforts.

The NGO Just Share said that it and 13 climate justice NGOs were asking Standard Bank’s shareholders not to elect or re-elect board members with fossil fuel links at its AGM later in June.

“A large proportion of Standard Bank’s board members have ties to South African fossil fuel companies, including Sasol [the country’s biggest carbon emitter after Eskom], Exxaro and BP Southern Africa. Five of the seven directors with fossil fuel ties are up for election or reelection at the company’s AGM on 26 June. They are: Trix Kennealy, Nomgando Matyumza, Priscillah Mabelane, Nonkululeko Nyembezi [and] Jacko Maree,” Just Share said in a statement on Monday, 8 June. All are board members of companies, notably Sasol, that are involved in the fossil fuels business.

“In 2019, Standard Bank became the first South African company to table shareholder-proposed climate change resolutions at its AGM. In 2020, after engaging with the bank, the RAITH Foundation and Just Share formally co-filed another resolution – this time asking the bank to extend its coal financing policies to include its position on oil and gas financing.

“This is particularly important in Standard Bank’s case, as it is one of the biggest oil and gas lenders in sub-Saharan Africa.”

To the surprise of the co-filers, Standard Bank refused to table the 2020 resolution. At first, its reason for this refusal was that the resolution was “premature”. Then, the company secretary provided a different reason for the refusal: an alleged legal technicality with regards to “the ability of shareholders to vote on climate-change related matters,” it said, adding that Sasol had used this same legal argument to block the tabling of climate change resolutions in the past.

Asked for comment, a Standard Bank spokesman said by email:

“In April, the Standard Bank board informed minority shareholders Just Share and the Raith Foundation that it would not table their proposed climate change resolutions for voting by shareholders at its 2020 Annual General Meeting. The submitted resolutions required the bank to adopt a policy relating to lending to carbon-intensive, fossil fuels activities as well as committing to a hard deadline for enhanced disclosures related to climate risk. The board resolved to not put these resolutions to vote as their substance does not fall within the scope of issues that shareholders have a legal right to vote on in terms of section 65 (3) of the Companies Act.

“The Standard Bank Group board’s decision not to allow the usurping of its role by stakeholders that do have any fiduciary responsibilities to the company does not suggest that the board is deviating from its environmentally responsible record and path. Standard Bank Group, which supports the Paris Agreement and is a founding signatory of the UN Principles for Responsible Banking, considers climate risk to be a material risk and the group is managing this risk in both its operational footprint and lending activities… The group has already made significant progress on these matters and has adopted policies on lending to coal mining projects and to coal-fired power projects, and is in the process of developing a broader fossil fuels financing policy.”

It seems unlikely that this initiative will bear fruit at Standard Bank’s AGM, but that doesn’t mean the move is just hot air. The winds of change are blowing in the corporate world, and coal is the new four-letter word in many boardrooms.

Norway’s $1-trillion sovereign wealth fund – built in large part on fossil fuel revenues from the country’s rich oil and gas sector – has divested from Anglo American and Glencore over coal. And Anglo American has signalled its intention to divest its South African coal assets, partly in response to shareholder concerns.

This kind of shareholder activism – aiming for profits that are not “dirty” – is a marked departure from conservation and other kinds of social activism in past decades. Expect more boards to come under climate change scrutiny. DM/BM