LETTER: Editorial misses the mark over Standard Bank and climate activists
Call is for shareholders to vote against election of fossil-fuel tied directors because they are conflicted
In your editorial you vigorously defend Standard Bank against what you portray as an attempted “takeover of the board by activists” (“Has the climate justice lobby gone too far?” June 9). Your editorial misrepresents our position.
Just Share and our partner organisations are calling on shareholders to vote against the election of Standard Bank’s fossil-fuel tied directors because they are conflicted (a matter you fail to address), not because they refused to table a climate change resolution. The manner in which they have refused to table that resolution is a red flag in relation to that conflict.
Almost half of the members of Standard Bank’s board, which is already bigger than most of its peers, have significant ties (executive or nonexecutive directorships) to coal, oil and gas companies, the worst culprits in contributing to the climate crisis. This concentration, therefore, may well hamper the board’s ability to interrogate the financial wisdom and social responsibility of continued lending to fossil fuels in the coming decade, the most crucial we have ever faced for tackling climate change.
How could Just Share not draw attention to the risks that this presents, especially in light of Standard Bank’s reluctance to disclose its oil and gas exposure? Why would Business Day not support this risk being brought openly to the attention of shareholders? How does this amount to a “takeover”, when no activist is nominated for election by shareholders to Standard Bank’s board?
Your concern that “it may also prove difficult to find qualified directors without some sort of a link to the fuel and coal industries” is exaggerated. Every other SA bank has largely managed to do so, whereas nearly half of Standard Bank’s board has such ties.
We do not agree that the resolutions being proposed were “impractical and could hurt its business”: they simply asked for greater transparency and disclosure. The resolutions that Standard Bank tabled in 2019 — to great acclaim, including from this newspaper — received strong support from shareholders. Almost identical resolutions tabled at three other SA banks have received more than 99% of shareholder support. What does Standard Bank’s refusal to table similar resolutions, relating to oil and gas rather than coal, say about the board’s ability to represent shareholder interests?
Your editorial does not express any concern that Standard Bank, now with three Sasol-associated directors on its board, has suddenly adopted the identical argument used by Sasol to block shareholder-proposed resolutions. Sasol’s approach was criticised by this newspaper when the company refused to table a resolution proposed by six institutional investors in 2019. Standard Bank’s refusal to allow a climate resolution to be put to its shareholders this year means that those shareholders are being denied the right to vote on matters that are standard practice in the US, the UK and elsewhere. This is a poor reflection on corporate governance in SA.
As you note, financial institutions will have to play a key role in driving the recovery from Covid-19. But there is global consensus that the boards of those institutions must be equipped to “build back better”, and not simply repeat the mistakes of the past.
Your editorial admits that “climate change is the biggest crisis facing humankind” but suggests that we “have gone too far” by merely pointing out that Standard Bank’s board is too close to the fossil fuel industry and is thus climate incompetent. We disagree. We are only just getting started.
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