FirstRand pulls the plug on coal

Banking group FirstRand, which houses FNB and RMB, has joined Nedbank in withdrawing its support for coal-fired power projects.

Coal is the single largest contributor to climate change. According to a recent UN report, the use of coal needs to fall 79 per cent by 2030, compared to 2019 levels, to meet the goals of the Paris Agreement. The Agreement aims to limit global warming to 1.5 degrees Celsius. This is to avert the worst impacts of climate change.

Support for coal plunges globally

Nedbank and FirstRand

In 2019, Nedbank became the first major lender in South Africa to pledge that it would no longer fund new coal-fired power stations, “regardless of technology or jurisdiction”. FirstRand made the same commitment in its newly released climate change policy document. It adds that from 2026, it will no longer provide direct project finance for new coal mines. The group says that its climate change policy will apply to all of its legal entities and third-party funds under management.

Climate change “is one of the defining issues of this century”, FirstRand says. “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.”

No New Coal by 2021: The Collapse of the Global Coal Pipeline

A report by independent climate change think tank E3G shows that there has been a 76 per cent reduction in proposed coal power globally since the Paris Agreement was signed in 2015.

Sub-Saharan Africa’s pipeline of new coal projects has shrunk by 47 per cent since 2015 to 15GW (5 per cent of the global total). Over this period, seven countries on the continent have fully scrapped their pipelines.

Just 13 countries in the region are still considering coal, and only South Africa and Zimbabwe are currently constructing new plants.

The report also finds that China is largely funding Africa’s pipeline of coal projects. China is the last remaining major provider of public finance for overseas coal projects. Japan and South Korea recently said they would end coal finance.

Chinese financial institutions are involved in 13 projects in eight countries in Sub-Saharan Africa, totalling 11.4GW of planned capacity, or 76 per cent of the total pipeline in the region.