Not up to standard
Shareholders direct a barrage of questions at CEO Sim Tshabalala at the bank’s AGM, after it refused to table two new climate change-related resolutions
ý What a difference a year makes. This time last year, Standard Bank was basking in the warm glow of good PR when it became the first SA corporate to table climate-related resolutions at its AGM.
Two resolutions were tabled — one for the bank to disclose its exposure to fossil fuel lending and the other to adopt and publish a policy on financing coal projects; the latter was, somewhat surprisingly, approved by shareholders.
This year, however, things got messy.
Africa’s biggest lender this time refused to table two further climate-related resolutions — one addressing its exposure to fossil fuels and one asking it to include its position on oil and gas financing in its new coal lending disclosure — asserting that shareholders did not have a legal right to vote on such matters.
Activists, led by shareholder activist organisation Just Share, hit back, calling on shareholders to vote against the reappointment of five directors to the board who, they allege, are conflicted on matters of climate change by virtue of their ties to fossil fuel companies.
However, at the 2020 AGM, held via webcast last week, their call to action failed and the directors were reappointed.
Standard Bank CEO Sim Tshabalala, meanwhile, addressed a barrage of questions from activists and others.
While the Standard Bank board felt it was in the interest of stakeholders for last year’s proposed resolution to proceed, not so this year, he said. “In our view it is not in the best interest of the company and stakeholders that its AGM become an annual platform for policy advocacy and debate.”
Tshabalala said allowing “singleissue advocates” with no fiduciary duties to dictate parts of the agenda for the entire group was not in the interest of good governance or democracy more broadly.
But the questions posed at the AGM were not only asked by nonprofits.
Aeon Investment Management voted against the relevant directors being reappointed when a question about how the conflict would be managed was not answered by the bank ahead of the vote. Chief investment officer Asief Mohamed says a conflict of interest can’t merely be described as “narrow interests”.
Notably, Standard Bank’s own group head of sustainability management, Karin Ireton, asked why the board would not table a proposed resolution to disclose its portfolio risk to climate change, given that it is “emerging best practice”.
Robert Lewenson, head of ESG (environmental, social and governance) engagement at Old Mutual Investment Group, which supported both climate-related resolutions at the 2019 AGM, says it is comfortable that the bank is tackling the question of its portfolio’s exposure to climate change as it has committed to produce a report on this later this year.
Lewenson says the group had not supported the call to vote against certain Standard Bank directors as it does not view a director as climate conflicted for simply sitting on the board of an extractive company.
However, Lewenson says Old Mutual Investment Group strongly disagrees with Standard Bank’s contention that the proposed climate-related resolutions are not a shareholder matter. “If the company had allowed the shareholder resolutions in 2019 on the same shareholder concern of climate risk then certainly it is a shareholder matter,” he says, adding that he expects the legal correctness of this argument to be tested soon.
Given the chronic inequality in SA, Mohamed believes NGOS ought to push corporates to act on social issues. When it comes to asset managers, he sees ESG as more of a marketing tool to get more assets. “In reality they do not
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