Johannesburg – FirstRand has become the latest bank to stop funding new coal mines following in the footsteps of Nedbank as pressure mounts for lenders to limit fossil fuel funding.
In its climate change policy and updated energy fuel policy published yesterday, FirstRand said it believed climate change was one of the defining issues of this century.
“It is a global crisis that has the potential to alter geopolitics and interstate relations, disrupt business models and markets across all sectors, and to impact the livelihoods and well-being of individuals across the world. FirstRand acknowledges that the group must be part of the solution by supporting climate resilience and a just transition to a low carbon world,” FirstRand said.
In the policy, FirstRand said its long-term ambition was to be net zero by 2050 for scope 1, 2 and 2 emissions.
The lender said it would no longer finance new coal-fired power stations with immediate effect and no longer provide direct project finance for new coal mines from 2026 onwards. In addition, the group added that it had reduced its short and medium-term caps on its overall coal exposure and provided inside on the expected long-term trajectory of its fossil fuel pathway.
It also said it recognised that energy consumption from fossil fuels – and coal in particular – were the biggest contributor to greenhouse gas emissions and constituted a priority area to address in the global decarbonisation pathways.
“This is actually a rational business decision as coal is no longer financially viable. Investing in new, long-term coal projects is very risky as solar is already cheaper and still becoming cheaper,” said former FNB chief executive Michael Jordaan on Twitter.
