How to influence this week’s vote by Standard Bank shareholders asking for better disclosure of climate-related risk

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Even Eskom’s outgoing CEO, Phakamani Hadebe, has observed that “every year, fewer investors are willing to fund fossil fuel”. Apparently, banks haven’t got the memo.

Our partners at Just Share, with the Raith Foundation and noted shareholder activist Theo Botha, have been leading shareholder activism in relation to Standard Bank. The bank’s Notice of Annual General Meeting, released on 17 April 2019, includes a resolution proposed by shareholders that:

would require the bank to prepare a report on its exposure to climate risk in its lending, financing and investment activities. This is the first time that a South African company has tabled a shareholder resolution on any climate-related issue. While the Standard Bank board recommends that shareholders vote against the resolution, its decision to table the resolution … is significant and ground-breaking.

If you feel strongly that banks, pension fund trustees, financial advisers and asset managers should be paying more attention to risky, carbon-intensive investments, and you have direct or indirect investments in Standard Bank, you may be able to support this action by the Raith Foundation, Theo Botha and Just Share.

If you’re not sure if your retirement funds (or funds with which you are otherwise associated) are invested in Standard Bank, then:

  • Google the name of the individual funds in which you are invested, e.g., “Investec Equity Fund”.
  • Look for the fund fact sheet. Most fund fact sheets list the top 10 equity holdings.
  • If the top ten equity holdings include “Standard Bank Group”,
  • then use this template letter to write to your retirement fund trustees or financial adviser, as follows:

Dear

My retirement savings are invested in funds which have a strong holding in Standard Bank, including [list your funds with Standard Bank holdings here].

I am writing to ask what the managers of these funds will be voting at Standard Bank’s upcoming AGM this coming May 30th namely with regards: to Resolutions 10.1 and 10.2 respectively in Standard Bank’s 2019 Notice of AGM, which refers to climate-risk related disclosures, and their justifications for their votes?

Standard Bank’s board argues that its ESG reporting already provides shareholders with sufficient information to enable them to understand the company’s climate change risk exposure and risk management. It is difficult to understand how this claim can be accurate when the company does not disclose the information that the Financial Services Board’s Task Force on Climate-related Financial Disclosures (TCFD) considers essential to enable investors to “measure and respond to climate change risk.” Without this disclosure, shareholders are unable to assess the extent to which they are exposed to climate risk via their holding in Standard Bank.

Voting in favour of Resolution 10 will not only provide Standard Bank’s shareholders with much more meaningful information on climate risk than is currently disclosed by any South African financial institution; it will also mean that shareholders will set a precedent which will dramatically accelerate the pace at which South African companies consider, manage and report on climate change-related risk. As top holders of Standard Bank shares, the funds that have invested my retirement savings are in a position to influence the outcome of this landmark resolution.

I look forward to your response.