Greens to Standard Bank: we’ll be back
Landmark climate change-related vote at AGM lost, but 38% support indicates more to come
Environmental and shareholder activists have claimed a victory even though the first climate-change-related resolution in SA was voted down at Standard Bank’s AGM on Thursday.
The resolution, which is the first of its kind to be tabled and voted on in SA, received support from a significant 38% of its shareholders. Although it was not passed, the amount of support indicated there could be more to come as pressure mounts for corporate SA to place climate change issues higher on the agenda.
The resolution was proposed by the Raith Foundation and shareholder activist Theo Botha, with support from Just Share, a responsible investment non-profit organisation.
If passed, Standard Bank would have been required to report to shareholders by the end of November on its exposure to climate risk.
Tracey Davies, executive director of Just Share, said it was a victory in itself that 38% of shareholders had voted in favour of the resolution.
"Around the world when these resolutions are first tabled, they get 2% or 5% of the vote," Davies said.
"This shows there is a significant chunk of institutional investors and asset managers who are clearly prepared to do the right thing when it comes down to the wire."
The outcome suggests that all other banks should consider this issue very carefully, said Kathleen Satchwell of the Raith Foundation. "Change happens slowly, but it happens," she said.
Botha said the way had now been opened up for shareholders to propose resolutions to other listed entities without reservation.
The same activists had attempted to table a climate-risk-related resolution at Sasol’s AGM in November 2018, but the company refused to allow it after taking legal advice.
The Standard Bank board allowed for the tabling of the resolution in the belief it was obliged to do so in terms of the Companies Act.
It, however, recommended that shareholders not pass the resolution because it was not practical to implement.
Allan Gray, whose clients hold 4.6% of the bank’s issued shares, said it supported the resolution "in principle" but recommended its clients vote against it because the proposed timeline was not feasible for the amount of work required.
The timeline was not raised as an issue by Standard Bank.
Another resolution, which would require Standard Bank to disclose a policy on lending to coal-fired power projects and coal mining operations, was placed on the agenda by the same activists and passed at Thursday’s AGM with 55% of the vote. Allan Gray said that it recommended its clients vote in favour of this.
This was another first, Davies said. "There are many global banks that have detailed public policies on their fossil fuel lending, but there are no SA banks which have such things in the public domain."
Piet van der Merwe, environmental social and governance analyst at Momentum Investments, said the approval on the public availability of the bank’s coal policies "augurs well for the future".
Van der Merwe said that to have climate change resolutions on AGM agendas in SA at all was a win for public awareness on the issue.
Botha said he expected the outcome of Thursday’s AGM would also "get the asset owners and managers to sit up andtake these issues a little bitmore seriously".