Just Share has released a briefing on the Investec Group’s fourth standalone climate-related financial disclosures report, published on 30 June 2023.
Investec’s dual-listing structure means that its 2023 climate report covers the activities of Investec plc (UK) and Investec Limited (Southern Africa). The briefing covers the climate-related disclosures relevant to Investec Limited, unless applicable to the whole group.
Also in June, Investec updated its Fossil Fuel Policy for the first time since it was adopted in 2020. The policy addresses the bank’s approach to financing coal, oil and gas. The most notable update is Investec’s commitment to decrease all thermal coal exposure to zero by 31 March 2030.
Unlike Standard Bank, Nedbank, and Absa, Investec’s overall exposure to fossil fuels has decreased over the past financial year. However, its exposure to gas has increased.
Key messages
- Investec’s commitment to decrease all thermal coal exposure to zero by March 2030 is the most ambitious target for reducing overall exposure to thermal coal of all the major South African commercial banks assessed by Just Share (Standard Bank, Nedbank, Absa, and FirstRand).
- Investec’s overall exposure to fossil fuels decreased by 32,77% in 2022: oil exposure decreased by 76% and coal exposure by 24%, although the reason for these decreases is not clear. However, the bank’s exposure to gas has increased by 9%, in keeping with its position on continuing to finance gas as a “transition fuel”.
- Investec’s renewable energy financing increased by 55% in 2022 (from R4 billion to R6.63 billion), with solar power making up most of its renewable energy portfolio. Investec recognises that renewable energy not only decarbonises the electricity sector, but also contributes to “energy access, security and affordability, especially in underserved communities”. Renewable energy now accounts for 63% of Investec’s total energy lending.
- Although, in compliance with a 2021 shareholder resolution, Investec’s “net-zero climate impact roadmap” sets out short, medium and long-term targets for the decarbonisation of its financing portfolio, it lacks sufficiently detailed targets and strategies for the period 2035 to 2050, particularly relating to reducing its exposure to oil and gas from 2035.
- Having significantly under-estimated its scope 3 financed emissions in 2022, Investec has adjusted and improved its methodology for reporting on scope 3 emissions. The bank discloses its financed emissions for six key asset classes covering 77% of its total financed emissions.
Investec recognises the significant risk posed by climate change to its business, and the negative climate impact of the continued financing of fossil fuels. The bank also acknowledges the importance of renewable energy financing for energy access and security.
Climate science requires emissions to be cut by nearly half by 2030, but Investec still plans to finance new oil and gas exploration, extraction and production up until 2035. If Investec’s lending activities are to match its stated commitment to climate action, the bank must review its plans for ongoing financing of oil and gas, and particularly its view of gas as a “transition fuel”.
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