SOUTH AFRICA – FirstRand Limited, one of South Africa’s largest banks, has announced that it will no longer finance new coal-fired power stations, and from 2026 will no longer provide direct project finance to new coal mines.
The company made the announcement after publishing its Climate Change Policy and an updated Energy and Fossil Fuel Policy on 15th September 2021.
FirstRand’s Climate Change Policy and Energy and Fossil Fuel Policy outline how the group is tackling the impact of climate change and cover the management of the company’s own emissions and financed emissions.
The two policies are informed by the current scientific consensus and incorporate feedback following a broad stakeholder engagement process.
The policies will be reviewed annually to ensure that the group’s position remains aligned with the rapid changes occurring globally, regionally and domestically.
“It is the long-term ambition of FirstRand to be net-zero by 2050 across operational and financed emissions,” FirstRand said in a statement.
“The group will reduce the cap on its coal financing drawn advances from 2% to 1.5% of advances from 2026 onwards. The group will reduce the cap on its coal exposure further from 1.5% to 1% of total advances from 2030 onwards,” the statement reads.
The financial services giant joins Nedbank in drawing the line in the sand on fossil fuel financing. Only two of South Africa’s big four banks, Absa and Standard Bank still maintain that they could finance fossil fuel, albeit under certain acceptable conditions.
The two banks’ positions on fossil fuel have been fiercely resisted with environmental activists over the previous few years.
FirstRand says a more comprehensive view of its climate change strategy and initiatives, including its business commitments to the facilitation of sustainable finance flows, as well as granular information on the group’s climate risk profile and underlying operational and financed emissions will be provided in its TCFD report.
The report will be issued prior to the release of FirstRand Limited’s annual integrated report for the year ending 30 June 2021.
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