- FirstRand, which owns FNB and WesBank, has updated its climate change commitments.
- The group has announced it will no longer finance new coal-fired power stations, and from 2026 will not provide project finance to new coal mines.
- FirstRand also plans to increase its share of renewable energy and green financing.
FirstRand, which owns FNB and WesBank, has announced it will no longer finance new coal-fired power stations "with immediate effect", and it will no longer provide direct project financing for new coal mines from 2026.
The group on Wednesday made the announcement in a shareholder notice. Its updated climate change and energy and fossil fuel financing policies, dated 30 June 2021, also indicate its new commitments. It also pledged its commitment to achieve net zero emissions by 2050.
Its decision to stop financing new coal fired power stations, is linked to the availability of more cost effective and environmentally friendly alternative power sources, the energy and fossil fuel financing policy document indicated. According to the document, FirstRand will continue to support the operational financing of its existing clients in the coal sector, for the continued functioning of the electricity grid.
Its its short-term goals - for the period up to 2030 - include reducing the cap on coal-financing-drawn advances from 2% to 1.5%.
Beyond 2030, the aim is to reduce the cap on coal exposure further from 1.5% to 1%.
"From 2040 onwards the group expects to accelerate its transition away from fossil fuels," the group's policy document read. During 2042 and 2049, coal is expected to no longer form the core of the South African energy mix, which will allow the "accelerated" move away from coal-related financing, FirstRand said in its policy document.
It further indicated it would support research on carbon capture and storage and other decarbonisation technologies, given that the "nature"' of the transition depends on the advancement of these technologies.
It also plans to increase its share of renewable energy and green financing.
"FirstRand recognises that fossil fuels are the biggest contributor to greenhouse gas emissions and are a priority area to address as part of the global decarbonisation pathways," the document read.