Standard Chartered announces interim targets, methodology for pathway to net zero

  • 2030 interim targets to reduce financed emissions for thermal coal mining, oil and gas, and power
  • Plan to mobilise USD300 billion in green and transition finance by 2030

LONDON: Standard Chartered (the Group) on October 28 announced ambitious new targets to reach net-zero carbon emissions from its financed activity by 2050, including interim 2030 targets for the most carbon-intensive sectors.
The Group’s approach is based on the best data currently available and aligns with the International Energy Agency’s Net Zero Emissions (NZE) by 2050 scenario.

Whilst 33 of the 59 footprint markets do not have a commitment to reach net zero by 2050, Standard Chartered has set out its plan for this timeline, recognising the pivotal role that can play in the transition. Many of these markets are currently reliant on carbon-intensive industries for their continued economic growth. Achieving a just transition — one where climate objectives are met without depriving developing countries of their opportunity to grow and prosper — will require capital and specialised support. The Standard Chartered is uniquely placed to help by directing capital to markets that have both the greatest opportunity to adopt low-carbon technology, and some of the toughest transition-financing and climate challenges.

Net-zero approach has three aims:

Reduce the emissions associated with the financing activities to net zero by 2050, setting 2030 interim targets in most carbon-intensive sectors

Standard Chartered’s current estimate of in-scope baseline emissions from the corporate client base as at year-end 2020 is 45.2 million metric tonnes of carbon dioxide equivalents, associated with $74.8 billion of assets (or 77 per cent of the Group’s total drawn on-balance-sheet financing exposure of $97.3 billion to corporate clients). There is currently insufficient available data to accurately reflect the financed emissions of the remaining 23 per cent of our in-scope corporate lending assets.

The Standard Chartered has a plan to stop financing, at an individual client entity level (e.g. subsidiaries), companies that are expanding in thermal coal. Likewise, the ongoing provision of financial services to the client group will be subject to enhanced due diligence. The Group aims to reduce absolute financed thermal coal-mining emissions by 85 per cent by 2030, in addition to the existing prohibition on financing new or expanding coal-fired power plants. By 2030 the Standard Chartered will only provide financial services to clients who are less than 5 per cent dependent on revenue from thermal coal.

With the expansion of green and transition finance, the Standard Chartered is targeting 2030 reductions in revenue-based carbon-intensity (i.e. the quantity of greenhouse gas emitted by our clients per USD of their revenue) of:

  • 63% for power
  • 33% respectively for steel and mining (excluding thermal coal mining)
  • 30% for oil and gas

While the NZE foresees a decline in fossil-fuel production, progress will not be linear and production of some fossil fuels may rise before it comes down in the markets. For instance, gas, as it replaces more carbon-intensive alternatives such as coal in the transition phase.

By the end of 2022, the Group expects all clients in the power generation, mining and metals, and oil and gas sectors to have a strategy to transition their business in line with the goals of the Paris Agreement.

Having already covered nearly two-thirds of in-scope financed emissions, targets for remaining carbon-intensive sectors will be announced in line with current guidelines from the Net Zero Banking Alliance, before the first quarter of 2024.

Meanwhile, Standard Chartered is sharing its methodology transparently in a white paper to help collective learning and encourage discussion and debate. As standards and methodologies evolve, and data quality and availability improve, the emissions calculations will be refined further. To ensure transparency, the Standard Chartered reports yearly on progress, in detail, as part of the Task Force on Climate-Related Financial Disclosures process.

Catalyse finance and partnerships to scale impact, capital and climate solutions to where they are needed most, including a plan to mobilise USD300 billion in green and transition finance

The new Transition Finance Framework sets out how the Group’s transition finance will be governed by alignment to the NZE and a set of well-defined principles that help guide our clients onto a low-carbon pathway.

Accelerate new solutions to support a just transition in the markets, including a new dedicated Transition Acceleration Team to support clients in high-emitting sectors, and launch sustainable products

The Transition Acceleration Team will provide the Group’s clients in carbon-intensive sectors with deep expertise on how to accelerate their low-carbon transitions, and tools to measure their progress. Likewise, the Group will launch a Universal Climate Finance Loan to incentivise clients to outpace national decarbonisation rates, as well as sustainable retail products such as green mortgages in key markets. In wealth management, by 2025 we aim to double sustainable investing assets under management and integrate environmental, social and governance considerations into our advisory activities.

José Viñals, Group Chairman, commented: “Following engagement with clients, shareholders and NGOs, we are today setting out our methodology for how we intend to reach net zero by 2050.

We are motivated by a belief that we can and must address the need for decarbonisation as a result of greater climate-related risks, which increase financing costs and hamper emerging markets’ long-term economic prospects.”

Bill Winters, Group Chief Executive, added: “We’re confident that we’re on a science-based trajectory toward net-zero financed emissions by 2050 that is consistent with the Paris Agreement.

As we reduce the emissions associated with our financing activities to net zero, we will also tackle financial barriers to the transition, including by making more green and transition finance available. This will help clients on a path to net zero while maximising the benefits of a just transition for people and communities.”

Standard Chartered Bank Nepal Limited

Standard Chartered Bank Nepal Limited has been in operation in Nepal since 1987 when it was initially registered as a joint-venture operation. Today, the Bank is an integral part of Standard Chartered Group having ownership of 70.21 per cent in the company with 29.79 per cent shares owned by the Nepalis public. The Bank enjoys the status of the only international bank currently operating in Nepal.

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