Standard Chartered’s 2022 Annual Report, released today, sees the bank continue to defy the urgency of climate change as it faces a shareholder challenge at its Annual General Meeting (AGM) in May.
Standard Chartered’s climate policy does not apply to bond underwriting of coal, oil and gas companies
Market Forces published a briefing, sent to the bank’s investors this week, which demonstrates how Standard Chartered’s climate policy does not apply to debt capital market activity, unlike the policies of peer banks Barclays and HSBC. In 2020, 53% of Standard Chartered’s financing for fossil fuels was through the underwriting of bonds, meaning around half of the bank’s 2020 fossil fuel financing is not covered by their climate policy at all.
For the financing that is covered, loopholes in the policy allow the bank to continue very high levels of fossil financing, including:
- Providing $31.4 billion in finance to fossil fuels between the signing of the Paris Agreement and the end of 2020,
- Increasing funding for companies expanding the scale of the fossil fuel industry by almost 420% from $579 million in 2016 to $3 billion in 2020, and
- Providing $3 billion in finance to companies expanding oil and gas in 2021, a 24% increase on its 2016-2019 average.
“Standard Chartered is picking and choosing the climate advice it wants to follow, ignoring the parts it finds inconvenient. But the International Energy Agency is crystal clear: ‘Net Zero by 2050’ means no new fossil fuel extraction, so the bank must stop funding new extraction of coal, oil and gas. Anything less than this isn’t a serious climate policy.
“Our briefing shows how the bank’s current climate policy only applies to around half of its 2020 fossil fuel financing, and the half that does apply is riddled with loopholes.”
– Adam McGibbon, UK Campaign Lead at Market Forces
The new briefing also explains how Standard Chartered is failing to meet its own ‘Net Zero by 2050’ goal:
- While the IEA calls for no new coal plants to be built as of 2021, Standard Chartered’s is the UK bank with the highest financing for new coal plant developers in Asia (financing USD $4.7 billion 2018-20).
- While the IEA calls for no new coal mines or mine extensions, Standard Chartered’s continues to finance companies like Adani Ports, the Adani Group subsidiary facilitating the highly controversial new Carmichael coal mine in Australia; and Glencore, which is involved in nine proposed new or expansion coal mining projects in Australia. Standard Chartered has also repeatedly financed Adaro Energy, an Indonesian coal giant that is expanding its coal business. The bank’s own analysis rates the company’s business plan as consistent with 5-6°C of global warming, a disastrous ‘hothouse Earth’ scenario, despite contributing to a loan to Adaro in 2021.
- While the IEA states there can be no new oil and gas fields approved beyond 2021, Standard Chartered has no restriction on lending to new oil and gas projects. Last month the bank was involved in a $10 billion revolving credit facility for Saudi Aramco, the world’s single largest corporate carbon emitter, which is expanding its operations and opening new oil and gas fields.
Market Forces and Friends Provident file shareholder resolution calling for bank to align net zero ambition with reality
Market Forces and the Friends Provident Foundation have filed a shareholder resolution for Standard Chartered’s May Annual General Meeting. The resolution calls on the bank to live up to its ‘Net Zero by 2050’ pledge by following the International Energy Agency’s ‘Net Zero by 2050’ pathway. The pathway, which gives a fifty-fifty chance of meeting the Paris Agreement’s 1.5°C temperature target, states that as of last year, no new coal mines, coal plants, or oil and gas fields can be built.
“Our door remains open to withdrawing our shareholder resolution, if Standard Chartered pledges to do what science demands.”
– Adam McGibbon