People take part in a "youth strike for climate change" demonstration in London, Britain February 15, 2019. REUTERS/SIMON DAWSON
People take part in a "youth strike for climate change" demonstration in London, Britain February 15, 2019. REUTERS/SIMON DAWSON

Climate change protests that have closed off parts of London in the past week, with hundreds of arrests, may have dominated the headlines as far as climate change is concerned. 

For that reason, it would have been easy to miss an important article published in the UK Guardian newspaper last week, highlighting the need to act now against the “human and financial costs of climate change are having a devastating effect on our collective well-being.”

It cited events from heatwaves in North America to droughts in Africa as examples of why this is an emergency now, despite the tendency to speak of climate change as some event in the distant future with little relevance for our current well-being.

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The floods and mudslides that have caused devastation and killed at least 60 people in Durban, together with the heavy rains that caused havoc around Port St Johns, are just another reminder of what’s at stake when severe weather events hit. And these come shortly after cyclones devastated parts of southern Africa, causing much misery in Zimbabwe, Mozambique and Malawi.

“Climate change is a global problem, which requires global solutions, in which the whole financial sector has a central role to play,” the authors wrote. The interesting thing about this article is that it wasn’t written by some green activists that climate sceptics are fond of mocking.

The writers included governors of two of Europe’s most important central banks, Mark Carney from the Bank of England and François Villeroy de Galhau, who heads Banque de France. It wasn’t the first time that Carney had voiced concern about the impending disaster, prompting accusations from critics that the central bank, which is primarily responsible for monetary policy, was overreaching.

The criticism seems rather shortsighted since the central bank is also responsible for the stability of the financial system, which faces major risks from floods and storms. The French and British central bank governors brought up the possibility that companies and sectors that fail to adjust will cease to exist. 

Banks, and the financial services more broadly, have come under pressure globally to demonstrate leadership on climate change. The days when issues around climate change were seen as an afterthought or nothing more than a marketing and public relations concern are slowly fading away as investors and consumers become more conscious of the costs.

At its annual general meeting this week, Dutch Bank ING was called to task by activists opposed to its financing of fossil fuel, while it also faced broader questions about involvement in projects that may be linked to human rights violations.

So the intervention by shareholder activists to try and force Standard Bank, the biggest lender in the continent, to prepare a report on its exposure to climate change risks in its lending, financing and investment activities should be seen in that global context. The resolution, to be tabled at the bank’s annual meeting, was brought about by shareholder activist Theo Botha and the Raith Foundation, a nonprofit organisation supported by responsible-investing lobby Just Share.

It is important in a number of ways, other than just the subject of the resolution itself, as important as that may be.

Their action has brought into focus a rarely used section in the Companies Act that could turn out to be an important tool for transparency and accountability. That the resolution was proposed by shareholders, never mind that they hold less than 0.01% of the company’s stock, may well be a defining moment.

On the proposal itself, Standard Bank said it would recommend that the rest of the shareholders reject it because it feels that it already does what’s required, and that such a report would not add much value.

If that’s the case, one can’t help wonder what harm could be done by even more disclosure. The momentum is towards more transparency and we hope corporate SA, not just banks, will be proactive so that we don’t need the state to introduce mandatory disclosures.