Standard Chartered CEO: ‘Noose is tightening' on corporate climate change accountability

Standard Chartered chief executive Bill Winters said the noose is tightening on the private sector to ensure it is accountable for its efforts to combat climate change.

Mr Winters told a virtual session at The World Economic Forum that while the private sector is “clearly stepping up”, with more commitments to net zero now on the table, the key to success will be the accountability of those commitments.

"It's tightening the noose on all of us," Mr Winters said.

“There's no shortage of net-zero commitments at this point, although there's clearly more that we could do. But the key is the ongoing accountability and the accountability is going to come from the stakeholders for the private sector companies … the asset managers and the people who fund the asset managers, pension funds, insurance companies."

Standard Chartered pledged in October to remove or help transform its most polluting customers by the end of the decade under plans to make its loan book net zero by 2050.

The London-based bank, which has faced calls from some shareholders to match its green pledges with action, said it aims to reduce the coal mining emissions it funds by 85 per cent by 2030 and will only provide services to clients who depend on thermal coal for less than 5 per cent of their revenue by that date.

Standard Chartered, which caters mostly to emerging markets and Asia, also aims to lend $300 billion to ensure firms can tackle financial barriers to the transition.

The announcement came in the run-up to the Cop 26 environment summit in Glasgow, when banks were facing growing pressure from climate activists to stop lending to companies that show no intention of transforming their operations to be compatible with global agreements to slow rising temperatures.

On Friday, Mr Winters said the ultimate key to success will be removing “the excuses that people like me, corporate CEOs, the excuses that we can deploy to explain why we're not quite there”.

“If [we] can remove the excuses, step up the accountability, refocus on consistent measurement, I think the private sector can contribute its fair share,” he said.

Mr Winters was also one of the engineers of the $130 trillion “wall of capital” pledged by a coalition of banks, insurers and asset managers at Cop26.

Under the leadership of Mark Carney, the former governor of the Bank of England, $130tn of private finance is now committed to science-based net-zero targets and near-term milestones, through the Glasgow Financial Alliance for Net Zero (GFANZ), set up last April.

Mr Winters set the challenge for the GFANZ is to ensure that money goes to where it is needed most – to nature and developing countries.

“The funding gap for nature-based solutions is something like $1tn a year. If we can't get that money to the right place, we're not going to accomplish our objectives,” Mr Winters said.

He said about one third of the required emission reductions by 2030 need to come from natural climate solutions.

“We know that something like 90 per cent of the practical solutions are sitting in emerging markets – developing countries like Indonesia and Brazil alone account for close to 30 per cent,” Mr Winters said.

“We also know that if we if we actually deliver these solutions, it's a real boost for economies locally, but also globally – something like 400 million incremental jobs and $10tn of economic growth. So, it's not all about cost but there are challenges.”

To help the private sector achieve its goals, Mr Winters said there needs to be “a good measure of the baseline”.

“If corporations are making net-zero commitments, that doesn't mean anything if we don't know with some clarity where we're starting, because that's the beginning of the process to hold the corporate world and everyone else accountable,” Mr Winters said.

“It’s never all about the money. The money is a pretty big obstacle right now and there's a huge amount of work going on in the private sector and inside asset management organisations to channel that money. But it's definitely going to require some partnership with the public sector as well.”