LONDON- Standard Chartered set new targets for reducing its funding to carbon intensive sectors by 2030, as part of a broader goal to reach net zero emissions for itself and its clients by 2050.
The Asia, Africa and Middle East-focused bank on Thursday said it would stop funding companies that are expanding in thermal coal, and by 2030 only provide financial services to clients less than 5% dependent on the fuel for revenue.
The bank said it would also reduce its financing to the power, steel and mining, oil and gas sectors, as well as expecting clients in those sectors to have their own transition strategies in line with the goals of the Paris climate agreement.
The announcement from StanChart comes ahead of a gathering of world leaders in Glasgow next week aimed at saving the planet from the devastation wreaked by rising temperatures.
StanChart, in common with other global banks, has in recent years bowed to activist and investor pressure to reduce its financing to fossil fuel-related clients.
The lender left some loopholes in its fresh commitments announced on Thursday, such as saying that its cutting of financing to thermal coal applied only at an individual corporate entity, or subsidiary, level.
Group-level client firms that StanChart provides financial services to will instead be "subjected to enhanced due diligence", it said.
"We’re confident that we’re on a science-based trajectory toward net-zero financed emissions by 2050 that is consistent with the Paris Agreement," Chief Executive Bill Winters said.
In response, Lucie Pinson, executive director of Reclaim Finance, said StanChart was "finally acknowledging the need to stop supporting expansion in the coal sector", but that its new policy had a "gaping loophole".
"Having channelled $10 bln to the coal sector between October 2018 and October 2020, the bank has given itself enough wriggle room to protect its interests in giant coal companies like Glencore, which is currently developing new coal mines in Australia and South Africa," she said in a statement.
After the International Energy Agency (IEA) earlier this year said the world needed no new fossil fuel projects if it wanted to hit its climate goals by mid-century, StanChart said oil and gas companies would need a Paris-aligned strategy by 2022.
Pinson, however, said it was unclear what this meant.
"If Standard Chartered is genuinely intent on requiring Paris-aligned strategies, then it should clarify that this means a clear stop to new oil and gas fields, in line with the IEA’s position."
(Reporting by Lawrence White; Editing by Emelia Sithole-Matarise and Mark Potter) ((email@example.com; +44 20 7513 5083; Reuters Messaging: @ReutersLawrence))