South African lender Absa targets net zero carbon emissions by 2050

The logo of South Africa's Absa bank is seen outside an Absa branch in Cape Town
The logo of South Africa's Absa bank is seen outside an Absa branch in Cape Town, South Africa, March 10, 2020. REUTERS/Mike Hutchings/File Photo

JOHANNESBURG, March 24 (Reuters) - South African lender Absa Group (ABGJ.J) aims to cut its net carbon emissions to zero by 2050 by curtailing lending to coal, oil and gas projects as well as increasing its exposure to renewables, it said on Friday.

"Absa Group, Africa's largest funder of renewables, announced today its long-term ambition to reach net zero state by 2050 for scope 1, 2 and 3 emissions," it said in a statement.

South African banks - among the biggest on the continent - have come under fire from activists and environmentalists for continuing to fund fossil fuel projects, in contrast with many of their global peers.

Nedbank Group (NEDJ.J) is the only lender to have committed to zero coal funding in any jurisdiction from 2025.

"While we recognise Africa's particular vulnerability to climate change, our approach to net zero also takes cognisance of the development needs of Africa's people," Punki Modise, Absa Group's chief strategy and sustainability officer, said in the statement.

Absa said its loan portfolio's exposure to coal would reduce to 0.03% by 2050, from 0.2% in 2023, while oil exposure would shrink to 0.32% from 1.41%.

Gas, being a transition fuel, will be a bit higher while renewable energy lending will increase at a compound annual growth rate of 26% by 2025, it said.

Reporting by Promit Mukherjee Editing by David Goodman

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