International banking group Standard Chartered announced today an update to one of its key value chain emissions reduction goals, replacing its prior intensity-based oil and gas sector financed emissions reduction target with a new commitment to reduce absolute emissions from its activities in the sector.
Standard Chartered has set a goal to reduce emissions associated with its finance activities by 2050, and in 2021 the bank announced interim goals for several of the most carbon intensive sectors that it finances, including an absolute reduction target for thermal coal mining, and intensity-based targets for the oil and gas, and power sectors.
Absolute emissions reduction targets, which effectively establish a set carbon budget, are seen as more robust than intensity-based goals, which could see financed emissions decline more slowly, or even potentially increase, based on the amount of business conducted by the bank in the sector.
The oil and gas sector is Standard Chartered’s largest single emissions source, representing more than 30% of its 2020 baseline financed emissions. Under the new target, the bank is aiming to reduce absolute emissions by 29% by 2030, or by 3.8 metric tons of CO2e. The prior target called for a 30% reduction in revenue-based carbon intensity for the sector.
In its statement announcing the updated goal, Standard Chartered also clarified its position on the role of natural gas in the energy transition, highlighting the importance of supporting its oil and gas clients through the transition, and the need to balance energy sustainability, security and resilience considerations. The bank said that while it will “prioritise renewable or green energy sources wherever practical,” in settings that do not allow for a direct green transition, it will support lower emissions intensity alternatives, with natural gas, including LNG, playing a role in the reduction of overall emissions.
Marisa Drew, Chief Sustainability Officer at Standard Chartered, said:
“This is an important step towards delivering on our net zero commitment. Setting this absolute sector target and supporting our clients in their transition journey are critical sustainability priorities for Standard Chartered. We believe that setting a defined intermediate goal for our oil and gas financed emissions will best help us to accelerate the energy transition, while ensuring that the transition accompanies economic development and the orderly adoption of new green solutions in our markets.”