Nedbank praised for zero fossil fuel exposure target
NEDBANK has been commended for its ambitious energy policy in which it aims to achieve zero fossil fuel exposure by 2045 as financial services play a leading role in the transition to a sustainable global economy.
Nedbank said it had committed to closing the taps on financing new thermal coal mines, regardless of jurisdiction, from January 2025 and would not finance any new oil production, regardless of jurisdiction, from January 1, 2035, nor would it fund any new coal-fired power stations, regardless of technology or jurisdiction.
The group said it would continue to finance natural gas production where it would play an essential role in facilitating the transition to a zero-carbon energy system by 2050.
The director of climate change engagement at Just Share, Robyn Hugo, said he hoped Nedbank’s approach would provide a much-needed impetus to other financial institutions to set meaningful targets and fossil fuel financing exclusions.
“We also call on all banks to abandon the narrative that the growth of fossil fuels is required for increased energy security and poverty reduction in Africa,” said Hugo.
The policy superseded the financing policy on activities related to thermal coal, which the bank adopted a year ago. “This policy serves to guide our transition away from fossil fuels, while accelerating efforts to finance non-fossil energy solutions needed to support socioeconomic development and build resilience to climate change,” said Nedbank.
Nedbank said financing for coal-mining companies, infrastructure related to thermal coal and trade related to thermal coal would be reduced to less than 1 percent of total group advances, with this decreasing to 0.5 percent by 2030.
The policy described thermal coal mining companies as companies that derived more than 40 percent of their revenue from thermal coal mining.
In a first for South Africa, Old Mutual this month said it would publish environmental, social and governance (ESG) ratings of its own locally domiciled unit trusts.
Old Mutual said the ESG ratings would enable investors easily to identify investment funds with higher ESG scores and allow investors to make informed choices about where to invest responsibly.
Old Mutual said through Old Mutual ESG Fund Ratings it aimed to create transparency.
“Our objective is to collaborate with other players across the financial services industry and to motivate the broader industry to adopt ESG fund ratings and to build trust through full transparency,” said Old Mutual Wealth.