350.org – Public finance institutions should be leading the fight against climate change

2019 has been a year of determined calls for climate action. We’ve seen young people rise up, lead on mobilisations and take governments across the world to task for failing to take urgent action in the face of increasing signs of climate breakdown. People everywhere are refusing to accept a business as usual approach over climate change. In South Africa, as in many parts of the world, they are demanding that public finance institutions act with the urgency and unity needed to prevent dangerous levels of climate change.

In South Africa, we have seen commercial banks take gradual steps forward on climate risk this year. FirstRand Limited and Standard Bank have joined Nedbank in committing to publish their lending and investment policies for fossil fuel projects, which drive the climate crisis. Nedbank is well ahead of its peers, having publicly committed to no longer finance new coal-fired power stations from 2019. They are also the only South African bank that discloses the proportion of assets exposed to fossil fuel-related risks.

While Nedbank and the other commercial banks still have a long way to go in terms of meaningful climate action, their undertakings far exceed measures taken by public finance institutions like the Development Bank of Southern Africa (DBSA) and Industrial Development Bank (IDC) who have failed to take noteworthy action on the climate crisis.

350Africa.org has been calling for public funds to be at the heart of tackling climate change for almost two years. In April 2019, 350Africa.org along with Earthlife Africa and #ThumaMinaDBSA supporters hand-delivered the names of over 8000 people calling for the DBSA not to finance the proposed Thabametsi coal fired power plant.

The #ThumaMinaDBSA call insisted that the development bank has a duty to ensure that projects that the bank finances are in the wider public interest and they are not financing harmful and expensive projects that speed up the climate crisis. The DBSA has since confirmed that they are currently not in line to finance to Thabametsi. While this is good news, the bank’s energy financing policies remain lenient, and leave the DBSA open to potentially financing new coal power infrastructure further down the line. While the bank has highlighted their financing of renewable energy, they have still not made a public commitment to stop fossil fuel financing. The DBSA’s efforts on climate action are diminished as a result of their potential exposure to projects that have a devastating impact on local communities.

Inaction on climate change by public finance institutions is putting young people’s future at risk today. To build on the work done so far, 350Africa.org’s work on public finance institutions is evolving into a broader call for South African finance minister, Tito Mboweni to insist that public finance institutions stop supporting fossil fuels. The DBSA and IDC need to commit to fuel exclusion policies, thereby eliminating the risk of additional future greenhouse gas emissions which threaten our survival.

Addressing the climate crisis will require significant public funds to develop a more sustainable, equitable and resilient South Africa. We need urgent and ambitious action from public finance institutions, where public funds finance a transformative just transition to promote and support the fight against climate change as well as addressing poverty and inequality in the country.

Any new investments in fossil fuel infrastructure will hinder efforts towards a progressive, just transition to renewable energy with huge losses for South Africa’s public finances. We have a short time left to embrace the opportunities of a just transition and do our part to stop the climate crisis.

We hope you will join us in 2020 to ensure that Finance Minister Tito Mboweni’s hears our call for public finance institutions to exclude all forms of fossil fuel finance from their energy lending portfolio, divest all their assets from fossil fuel companies and invest in a fair, fast and just transition away from fossil fuels to renewable energy.

Delaying action will mean that the climate crisis will continue to threaten public finance, making it more challenging to protect vulnerable people, communities and sectors from the impacts of climate change. Public finance has an essential role to play in effectively tackling and building the resilience of the most vulnerable people in our society. While they can’t finance a transition alone, they have to lead the way.

Right now, the COP25 climate talks are taking place in Madrid, Spain. Many governments (like South Africa) are attending the climate summit to discuss and agree measures to deal with climate change – making it the perfect time for us to put pressure on them to stop funding fossil fuel projects. Add your name to the petition to call on governments to stop using public money to fund fossil fuels, and we’ll deliver it to the South African delegation before the climate talks end.

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