Nedbank, has announced it will stop financing new thermal coal mines from 2025 and cut direct funding of new oil and gas exploration projects with immediate effect. According to Nedbank chief financial officer, Mike Davis, the bank’s new policy will ensure appropriate support is given to existing energy requirements while the bank arranges an orderly transition away from fossil fuels.
“Nedbank’s energy policy serves to guide the bank’s transition away from fossil fuels while still providing appropriate support to existing energy requirements,” said Mr Davis. The bank added that it would direct investment towards renewable energy sources, with plans to withdraw entirely from fossil fuel extraction activities by 2045.
South Africa is the continent’s biggest greenhouse gas emitter and receives most of its power from coal-fired power stations. As some of the biggest lenders on the continent, South Africa’s banks have faced increased scrutiny from environmental activists recently over their decisions to continue financing of oil and gas projects .
Nedbank aims to be at the forefront of managing climate risks and financing innovative solutions to support socio-economic development and build resilience to climate change. It has also committed to provide US $141m to local renewable power generation, giving impetus to other financial institutions to set their own decarbonization targets.
“Failure to address climate change will commit the African continent to a much more challenging and less prosperous future, since Africa is both highly exposed to the physical impacts and often lacks capacity to respond to those impacts,” Nedbank’s new climate policy states.