The unwilling pioneer
The bank is allowing a vote relating to greenhouse gas emissions and climate change after activists requested it
Full marks to the Standard Bank board for agreeing, albeit perhaps a little reluctantly, to table a shareholder resolution addressing climate risk at its upcoming AGM. Ironically, though the board is recommending that shareholders vote against the resolution, its implementation would bring Standard Bank’s disclosure policy in line with that of its single largest shareholder, the Industrial & Commercial Bank of China (ICBC).
This is not the first time SA shareholders have taken advantage of provisions in the Companies Act of 2008 (section 65) allowing them to table a resolution, but it is the first time a board has not rejected the move.
And so Standard Bank rightly deserves its place in SA’S legal history books.
Last year the boards of Sasol and Trencor slapped down efforts by their shareholders to table resolutions.
In the process they looked dictatorial and out of touch with a new, more enlightened corporate governance era. Trencor might take comfort from being at a comfortable distance from the cutting edge of anything, but Sasol’s response looked totally inappropriate.
As one of the world’s largest polluters, Sasol must have expected that shareholder activists would come knocking sooner or later about climate change.
In April last year that’s just what Theo Botha and the Raith Foundation did. The foundation is a nonprofit organisation campaigning for social justice issues in SA. The activists wanted a resolution to be tabled that would allow shareholders to vote about whether the company should prepare an annual report detailing how it is assessing climate-related transition risks and ensuring it is able to deal with them.
As Sasol emits 67.6Mt of greenhouse gases a year and faces regulatory pressure to reduce this, the transition risk seemed the very essence of what shareholders should be entitled to vote on. The Sasol board believed otherwise and scuttled off to get legal opinion to support that belief.
At the end of June it informed Botha and
Raith that their bid had been denied. It said it had received legal opinion that “the matters included within the draft resolution [presented by the activists] are within the authority of the board and management and do not constitute matters that shareholders are entitled to exercise voting rights on within the meaning of section 65(3)(a) of the Companies Act”.
While sharing the essence of the legal opinion, Sasol did not share the details of it with the activists.
A few weeks later the Trencor board trotted out a similar response when two shareholders, Chris Logan and Elizabeth Corbett, presented it with resolutions they wanted tabled at the AGM.
The resolutions challenged the existence of contracts in the operating companies that protect executives from a hostile takeover. Logan