n 8 June 2020, 14 climate justice NGOs led by Just Share wrote to asset managers with shares in Standard Bank Group Limited (Standard Bank), calling on them to vote against the election of five climate-conflicted directors at the bank’s AGM on 26 June.

Seven of Standard Bank’s 18 board members have close ties to the fossil fuel industry. Of those, the following five are up for election:

Trix Kennealy: Standard Bank lead independent non-executive director (INED); also an INED at Sasol.
Nomgando Matyumza: INED at Sasol.
Priscillah Mabelane: recently appointed to join Sasol as executive VP for energy; previously CEO of BP Southern Africa.
Nonkululeko Nyembezi: CEO of Ichor Coal N.V.
Jacko Maree: INED of the Phembani Group, which has holdings in Umcebo Mining (coal), Izimbiwa Coal, South32 and Engen.
We have received numerous questions about our call from investors and the media. We set out responses to the most frequently asked questions below.

Why are Standard Bank directors with ties to fossil fuel companies conflicted?

Almost half of Standard Bank’s board, which is already bigger than each of the boards of its South African peers, have significant ties (executive or non-executive directorships) to coal, oil and gas companies, the worst culprits in contributing to the climate emergency.

These companies clearly do not want financial institutions to phase out their lending to the fossil fuel industry. However, achieving the goals of the Paris Agreement requires banks to do exactly that.

The goals of the Paris Agreement are:

To hold the increase in the global average temperature to “well below 2 degrees Celsius above pre-industrial levels”;
To increase our ability to adapt to climate change and “foster climate resilience and low greenhouse gas emissions development”; and
To “make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.
Standard Bank admits that climate change is a material risk to its business, and has committed to take climate action in line with the Paris Agreement and the Sustainable Development Goals by virtue of its commitments to initiatives like the UN Principles for Responsible Banking.

The number and concentration of Standard Bank board members with ties to the fossil fuel industry may well hamper the board’s ability to interrogate the financial wisdom and social responsibility of continued lending to fossil fuel companies in the coming decade, the most crucial we have ever faced for tackling climate change.

In these circumstances, responsible investors holding Standard Bank shares are faced with no good options: either these board members will recuse themselves, creating a corporate governance void when the board considers some of its most important strategic issues, as climate-related matters are; or they will not, compromising the ability of the board to provide climate-competent leadership.

via Q&A: Climate risk & board conflicts at Standard Bank – Just Share