Tuesday, June 16, 2020
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 content of the resolutions is therefore an attempt to usurp the role and function of the Board. Full management control of Standard Bank Group is vested in the board in terms of section 66(1) of the Companies Act.
The directors that Just Share is singling out in its press release are all non-executive directors. They bring diverse sets of skills and experience, across a range of industries, and are valuable members of the Group board with a proven track record of leadership and integrity. Non-executive directors inevitably serve on boards of different companies. In all instances, a director’s conflict of interests is governed by the Companies Act and arises in instances where the board has to take a decision in respect of a company a director may have an interest in. The board is satisfied that these directors continue to fulfil their fiduciary responsibilities to the Standard Bank Group in an exemplary manner and recommends their re-election by shareholders.
The Standard Bank Group board’s decision not to allow the usurping of its role by stakeholders that do not 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. It is doing extensive work to enhance its assessment of climate risk and to make appropriate disclosures in line with the TCFD principles. The Paris Agreement recognises that the transition to lower-carbon economies will take longer in developing countries, especially those on the African continent where access to reliable and affordable energy remains a challenge for socio-economic development.
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.
In particular, the Standard Bank Group:
The Standard Bank Group will continue to operate as a good corporate citizen and will continue to listen to the views of its stakeholders where appropriate and reasonable to do so.