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How to be Africa’s ‘leading sustainable bank’ while funding a carbon bomb

Stephen Horn
By Stephen Horn
4 Jul 2024
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In the past year, Standard Bank invested 74% of its R133bn energy portfolio into fossil fuels. Shareholder accountability organisation Just Share ranked it the worst among South African banks based on its mitigation efforts and understanding of climate risk.

On 4 June 2024, environmental campaigner Stephen Kwikiriza was abducted and beaten unconscious, allegedly at the hands of the Ugandan armed forces, on the outskirts of the capital, Kampala. According to The Guardian, Kwikiriza is one of 11 activists opposed to the development of the controversial East African Crude Oil Pipeline (Eacop) who have been targeted by the authorities in recent weeks.

In the same week that Kwikiriza was finally found — alive but abandoned hundreds of kilometres outside the city following days of questioning and abuse — news broke that Standard Bank intended to finance the pipeline.

This came as a gut punch to activists and many scientists who had been urging the bank to reconsider the impact of its energy investments, particularly concerning the financing of this project.

‘Carbon bomb’


The pipeline is deemed a “carbon bomb” due to the enormous amounts of planet-heating greenhouse gas emissions it will generate once it goes live. 

Some studies have put the figure as equivalent to more than 20 coal-fired power plants.

Beyond the climate impacts, more than 100,000 people are expected to be displaced by the pipeline’s construction, with many claiming they have received inadequate compensation. 

Students and activists have been arrested for protesting against the TotalEnergies-led project, which has been condemned for human rights violations by the EU parliament.

Moreover, the pipeline will traverse exceptionally fragile natural ecosystems that sustain both livelihoods and a rich array of biodiversity.

In short, there are good reasons why this project has been vehemently opposed. And its development comes at a critical time in the fight against climate change.

Almost daily we are seeing record-breaking heat waves, floods and wildfires around the world, alongside extensive crop failure in many parts of Africa.

According to the International Energy Agency, there can be no new fossil fuel projects if we are to avert a full-on climate catastrophe. Further, the agency predicts that the global oil market — in which Eacop will have to compete — will soon be heavily oversupplied as the energy transition gets into full swing.

Strong-arm tactics


With this in mind, climate activists staged a sit-in at the company’s headquarters at Standard Bank’s 2023 AGM, demanding the bank stop financing the fuels that are exacerbating extreme weather around the world.

At the meeting, one of the world’s most respected voices for social justice, anti-apartheid activist and former head of Amnesty International, Kumi Naidoo, was forcibly ejected from the building. On another occasion, the bank’s security manhandled a journalist covering a similar protest for Daily Maverick.

https://www.dailymaverick.co.za/article/2023-06-12-kumi-naidoo-forcibly-removed-from-standard-bank-hq-after-protest-over-crude-oil-pipeline-project/

A video showing the drama unfolding at the bank’s premises has received more than 430,000 views and a leading environmental journalist returned the Standard Bank-sponsored Sikuvile journalism award she received for work covering the increasingly devastating climate impacts faced by the city of Durban.

As the bank’s PR team felt the heat, there were attempts to smooth things over, but no meaningful action has been taken by the bank to address its enormous investments into new fossil fuel energy.

In the last year, the bank invested 74% of its R133-billion energy portfolio into fossil fuels. Shareholder accountability organisation Just Share ranked Standard Bank the worst among South African banks in a recent report titled “How cool is your bank”, based on its mitigation efforts and understanding of climate risk. The bank scored just 16 out of 85.

One can only wonder then how the bank was recently crowned the Leading Sustainable Bank in Africa by African Banker magazine.

Disinformation


One reason might be the bank’s extensive PR and advertising efforts to put on a “sustainable” front, even though it does exactly the opposite. Standard Bank’s advertisements showing solar panels and wind turbines have become so commonplace that one would be forgiven for thinking that it is a renewable energy company.

In 2022, the bank ran a Twitter crossword competition asking social media users to find as many words related to #EnvironmentalSustainability as possible.

In January it launched a glossy web series called “The Blue Space” anchored by Joanne Joseph. In an episode titled “How can investors fuel Africa’s energy transition?” the bank platforms NJ Ayuk, the executive chairperson of the notoriously pro-fossil fuel energy front group, the African Energy Chamber.

Surrounded by images of solar panels and wind turbines in lush green settings, Ayuk’s final comment is that “the arc of a moral universe is long, but it bends towards justice.”

The irony of this quote from Martin Luther King being used by someone who has been convicted of fraud in the US was lost on Joseph, who unsurprisingly failed to arm viewers with this crucial knowledge about her guest.

In our 2023 F-list report listing the advertising and PR agencies promoting fossil fuel companies in South Africa, we drew special attention to the African Energy Chamber as a major source of climate disinformation. It uses a PR wire service called APO Group to distribute press releases promoting fossil fuel development around Africa with little regard for the much more affordable renewable energy technologies now available to African countries.

Fighting back


As Standard Bank continues to launder its reputation through PR and advertising agencies, efforts to hold companies responsible for their misleading ads are now under way locally. The South African Fossil Ad Ban campaign recently filed a complaint against TotalEnergies with the Advertising Regulatory Board (ARB).

Encouragingly, many agencies now refuse to do the bidding of climate-wrecking companies, even if that means giving up lucrative contracts. 

The Clean Creatives movement now incorporates more than 1,100 ad and PR agencies that have cut ties with fossil fuel companies, a call echoed by the UN Secretary-General on World Environment Day on 5 June 2024.

As authorities tighten regulations around sustainability (the ARB is currently revising its environmental claims code) the marketing industry in particular needs to scrutinise the core business activities behind any business it works with, banks included, to ensure it is not greenwashing or misleading the public in any way.

As I think of the horrific ordeal endured by Stephen Kwikiriza in fighting for a liveable planet and a right to a truly sustainable and just energy system in his home country of Uganda, I feel the weight of responsibility to communicate here in South Africa the enabling role our corporate sector is playing in environmental destruction, violence and the silencing of dissenting voices far away in more authoritarian states across the continent.

It is incumbent on all of us with a platform to speak out and take action. 

We can, for example, switch to a bank that takes sustainability seriously, rather than boasting about its green credentials despite its willingness to fund destructive projects. DM

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