Welcome to the past. When the National Party was still ruling South Africa, Barclays, a major and highly visible British bank, was one of the favourite targets of the British anti-apartheid movement and various other lobbyists seeking disinvestment from South Africa. Eventually, Barclays dumped its South African subsidiary (which is now First National Bank). Many other multinational corporations did likewise.
South Africa was just not worth the adverse publicity every time the annual general meeting (AGM) came round. Now, once again, Barclays is in the firing line, this time over “climate change”. According to the Bloomberg news agency, Barclays is Europe’s biggest financier of “corporate carbon emitters” and is under growing pressure from shareholder activists to burnish its green credentials.
In South Africa, Sasol has also been facing increasing demands from shareholder activists. Supposedly the country’s largest emitter of greenhouse gases, Sasol has agreed to table a climate-related resolution at its 2021 AGM. Slowly, but surely, it appears, the corporate sector is bowing to pressures from green activists. Financing of coal projects has already been declared a no-no by numerous banks and other financial institutions in various countries.
But why the focus on coal and other fossil fuels? The assumption is that “renewable energy” is cleaner and better for the environment. This may or may not be true, but it is odd that the renewables sector – manufacturers, suppliers, and financiers – are not subjected to scrutiny by shareholder activists in the same way as the coal sector. If all the various types of energy on offer were subjected to the same scrutiny, we would all be in a better position to determine which types of energy are the most friendly to the environment.
Renewables, including solar panels, wind turbines, and storage batteries, require iron ore, steel, glass, concrete, plastic, and various kinds of rare-earth and other minerals in their manufacture. So one question shareholder activists could ask is what quantities of these materials would be required for renewables in large enough quantities to replace fossil fuels to meet the net zero carbon target envisaged by the Paris agreement of 2015.
A paper last year by Mark Mills of the Manhattan Institute claimed that “compared with hydrocarbons, green materials entail, on average, a tenfold increase in the quantities of materials extracted and processed to produce the same amount of energy”. The renewables industry could be asked whether or not this is true.