Financing may become more difficult for miners and electricity producers unless their carbon footprint decreases, according to South Africa’s Nedbank. The country’s fourth largest bank said it planned to spend between R10 million to R20 million on awareness and would push for more alternative energy to be incorporated into business strategies.
"Certainly we would far rather be financing alternative forms of energy… So projects that are going to have to pay carbon penalties are just not going to be viable," CEO Tom Boardman said. "If we go into something where we believe it is absolutely off-side then we would have to make the call. No we are not going to fund a project that is not even attempting to make a difference."
South Africa is Africa’s highest carbon emitter as a result of its heavy dependence on coal-fired electricity. And the bank’s clients include big names like Eskom and Sasol (both of which have heavy dealings with coal), and while the government is instituting methods to reduce its carbon output, this could be an indicator of a sort of check and balance system that is more capable of instituting alternative energy policies.
"We have to understand that this is a process and a journey and the developing nations can’t just switch off everything. It is a fact in South Africa that the majority of our electricity is produced by coal," Boardman said. "But we absolutely are committed to working with our client base to increase their awareness and to drive toward projects falling within the parameters ultimately that we commit ourselves to."