Standard Chartered accused of hypocrisy over climate change

Standard Chartered has been accused of hypocrisy on climate change by an influential pressure group, which warned the bank will be the target of shareholder action unless it tightens its fossil-fuel lending policies.

Market Forces, an activist environmental group that has led shareholder resolutions at Barclays and Rio Tinto, raised doubts about StanChart’s public commitments to the Paris agreement in light of its continued financing of big carbon emitters.

The group said StanChart recently participated in a $400m, five-year syndicated loan to Indonesian coal miner Adaro Energy. This was despite the bank’s own internal calculations showing Adaro’s contribution to global warming was plainly incompatible with the Paris accord, it said. 

“If the bank really means what it says about supporting the Paris agreement, it must stop funding companies that will lead to the agreement’s failure,” said Adam McGibbon, UK campaigner for Market Forces.

“We’re putting Standard Chartered on notice that if we don’t see improvement in their policies, we will table a shareholder resolution for next year’s annual meeting and seek investor support to force the bank’s leadership to properly address the climate crisis.”

StanChart said it was “developing an advisory resolution for our 2022 AGM to support dialogue on our net zero plans” and “looks forward to engaging with all investors on our plans”. It declined to comment on Adaro.

While banks such as Barclays, HSBC and JPMorgan Chase have come under fire in recent years over their role in climate change, StanChart has escaped the same level of scrutiny.

But according to a recent report from Reclaim Finance and Urgewald, two non-profits focused on climate issues, StanChart provided more than $10bn in financing to coal companies in the two years to October 2020. The bank is ranked as the biggest backer among UK lenders of coal power expansion activities — largely owing to its significant business interests in Asia.

A separate report from the Rainforest Action Network found the bank had pumped more than $30bn into the fossil fuel industry since the Paris agreement was signed, aimed at tackling global temperature rises.

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StanChart introduced its first coal policy in 2018, banning the direct financing of new coal plants, updating this a year later to exclude mining and power companies with 100 per cent of their earnings from thermal coal from 2021 onwards. This will be gradually lowered to reach 5 per cent by 2030.

Critics have argued that for some coal developers, the fossil fuel is a very small proportion of overall revenue, meaning StanChart will still be able to back them.

Binbin Mariana, Indonesia campaigner for Market Forces, said the financing of Adaro shows the bank’s climate policy was “barely worth the paper it’s printed on”.

Last week, about 14 per cent of shareholders backed a Market Forces climate resolution at Barclays, with a further 12 per cent abstaining.

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