The board of Standard Bank is on the hunt for a nonexecutive director with skills on climate issues and finance, as Africa’s biggest lender by assets cements its position as one of the largest investors in green energy in SA.
Standard Bank chair Nonkululeko Nyembezi told shareholders in the group’s 2023 annual report that it has been a challenge to find a suitable director with expertise on environmental, social, and governance (ESG) and its intersection with finance.
“We continue to search systematically for a potential director with deep expertise at the intersection of financial services and ESG (particularly climate issues and finance), but the talent pool is not large and demand is very high. For the time being, we obtain expert advice as required,” said Nyembezi.
Since the launch of its climate policy in March 2022, the group has been tracking ahead of its target to raise R250bn-R300bn for sustainable finance by the end of 2026.
The bank’s strategy is centred on a transition away from finance for coal-fired power, including a commitment to no further financing for the construction of new coal-fired power plants or for the further expansion of generating capacity of existing coal-fired power plants.
To this end, “Big Blue” as the lender is referred to in high finance circles due to the size of its balance sheet, wants to limit thermal coal exposures to 0.70% of group loans and advances in 2021 and 0.50% by 2030.
Standard Bank also wants to reduce group advances to upstream oil by 5% by 2030.
“We recognise the need to actively manage and reduce our exposures to oil over time as part of a broader transition to net zero. We do however have a responsibility to support and prioritise social and economic development in Africa, and we recognise the importance of balancing this need with our support for a just transition away from nonrenewable energy sources,” the bank said.
“Our focus is on financing clients with a corporate net zero and energy transition strategy. We require that any new oil client, or oil transaction with a tenor of over 12 months, must be assessed to test alignment with the SBG climate policy and determine climate change.”
Modise Makhene, client partner and country manager for SA at executive search firm Pedersen & Partners, said that over the past couple of years on the African continent there had been an alignment with the rest of the world on the importance of environmental issues led by climate change.
“The financial services sector, particularly the investment community such as private equity, venture capital and hedge funds, has been at the forefront of driving that change; hiring whatever limited ESG expertise in the market due to growing pressure from regulators, shareholders, pension funds and customers,” said Makhene
“They are snapping up ESG talent at an alarming pace as they go to market to raise funds. There is a discernible and acute demand-supply gap. The shortage of such skills at a senior board level can be attributed to the nascent stage of ESG — climate change integration in the financial sector and the low throughput of sustainability-related skills through SA’s education system.”
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