Standard Chartered Plc has admitted that its 2025 target of running entirely on renewable energy is proving difficult to achieve, citing significant market limitations in several countries where it operates.
Bloomberg reports that the UK-based financial giant highlighted the scarcity of renewable energy options in key markets across Africa and the Middle East as a major roadblock to its ambitious sustainability commitments.
In its annual report released on Friday, the bank pointed to “market constraints” in countries such as Bahrain, Botswana, Ghana, Iraq, and Tanzania.
These nations lack sufficient access to clean energy sources, making it increasingly difficult for the bank to fully transition its power supply to renewables as planned.
StanChart had originally made the commitment in 2022 as part of its broader environmental, social, and governance (ESG) strategy, aiming to cut down its carbon footprint significantly.
Despite these challenges, the bank remains steadfast in its sustainability efforts.
Current Progress on Renewable Energy Usage
Despite the hurdles, Standard Chartered reported that it had actively increased its renewable energy consumption for electricity to 77% in 2024 through power purchase agreements, clean energy contracts, on-site solar installations, and renewable energy certificates.
This initiative contributed to a 34% reduction in its Scope 2 emissions—those generated from electricity usage.
However, the bank acknowledges that meeting its full transition goal by 2025 remains an uphill battle. To mitigate the impact, it has turned to carbon offset strategies, purchasing carbon credits to counterbalance emissions from operations.
Long-Term Net Zero Commitments
StanChart has set a broader goal to achieve net zero in its Scope 1 (direct operational emissions) and Scope 2 emissions by 2025. The bank projected it would generate about 23,000 tons of CO2 equivalent in 2023, emphasizing its ongoing reliance on carbon credits to manage its footprint.
For its Scope 3 emissions—those generated from its lending and investment activities—the bank has set a net-zero target for 2050. It has also introduced interim targets for 12 high-emission sectors, including oil and gas, to be met by 2030. Additionally, it has begun reporting emissions from its agriculture-related clients, a step toward increased transparency in its financed emissions.
Broader Industry Challenges
StanChart is not alone in struggling to meet aggressive climate goals. Earlier this week, HSBC Holdings Plc announced a two-decade delay in implementing some of its key sustainability targets. Both banks attribute their challenges to the wider economic landscape, noting that aligning portfolios with the Paris Agreement’s 1.5°C scenario is increasingly difficult as global warming trends exceed expectations.
A recent report by climate nonprofit CDP demonstrated the challenge, stating that banks’ Scope 3 emissions—stemming from their loan books and investment portfolios—are on average more than 700 times higher than their direct operational emissions.
