Weighing in on South African Banks

Following our investigations and analysis of banks in the UK,  US., Ireland, and Canada, we turned our attention to South Africa in early 2025.

The South African economy relies heavily on natural resource extraction but is well-positioned to harness renewable energy. Our focus, therefore, was to assess how its banking sector is supporting the clean energy transition with its renewable energy lending.

How We Rate Banks

We assess banks based on their climate impact across five categories:

• Leader in climate responsibility (Great)
• Climate responsible (Good)
• Room to improve on climate responsibility (OK)
• Falling short on climate responsibility (Bad)
• Failing on climate responsibility (Worst)

Our analysis focuses on several critical factors, including:

• The proportion of lending to fossil fuels versus renewable energy.
• The strength of exclusion policies regarding high-emission industries.
• The transparency of climate-related risk disclosures.
• The effectiveness of their governance structures in addressing climate issues.

For a breakdown of how we evaluate these factors, visit our methodology page.

South African Bank Ratings

We rated the country’s 13 largest banks—11 headquartered domestically and two subsidiaries of Nigerian banks (Access and Zenith). We found that a majority (69%) of these banks need improvement on their climate responsibility. These results paint a slightly better picture than the US banking sector. Also, keep in mind that our analysis focuses solely on fossil fuel financing rather than broader mining activities.

However, when we consider those banks (31%) on the other end of the spectrum, none emerge as clear leaders. While some banks demonstrate climate responsibility, their commitments are not yet strong enough to place them at the top of the ratings.

In summary, no South African bank achieved a Great rating. Of the 13 banks assessed:

• 4 banks (31%) are rated Good
• 1 bank (8%) is rated OK
• 5 banks (38%) are rated Bad
• 3 banks (23%) are rated Worst

Transparency is Clearly Missing

Like the US, we see a glaring lack of transparency among South African banks. To recap why transparency matters, let’s reiterate what we highlighted in that report:

"Transparency is crucial because it ensures banks are forthright about their climate impact, specifically whether they are financing fossil fuel projects or investing in renewable energy. Without transparency, it’s difficult for consumers or regulators to hold banks accountable for their role in the climate crisis."

Missing Details about Fossil Fuel and Renewable Energy Lending

We found that one-third of banks don't provide even basic transparency regarding their lending to the fossil fuel and renewable energy sectors. This lack of disclosure raises concerns that these banks may be concealing the extent of their support for fossil fuels—the single largest driver of the climate crisis.

Emissions and the Reality of Climate Commitments

Transparency is particularly critical when it comes to emissions reporting. Under our rating criteria, banks must account for the greenhouse gas emissions enabled by their lending (known as Scope 3, Category 15 emissions under the GHG Protocol). These “financed emissions” make up 99% of a bank’s overall emissions and represent the most significant opportunity for banks to drive climate-positive change.

Despite this, only 5 out of 13 South African banks (38%) disclose any financed emissions. Even more concerning, four additional banks (Access, African, Bidvest, and Discovery) have set emission reduction targets but have failed to include financed emissions within their target boundaries—effectively ignoring their largest source of emissions.

Unsurprisingly, none of the banks have had their climate targets validated by the Science Based Targets initiative (SBTi), the gold standard for corporate climate goal setting. Taken together, these omissions seriously undermine the credibility of the banks’ commitments.

Weak Exclusion Policies

Exclusion policies are formal commitments by banks to refuse financing for high-emission industries like oil, coal, and gas. These policies are a key indicator of genuine climate action, and our findings for these South African banks are bleak:

• Only half of the banks have any exclusion policy at all.
• None have exclusion policies strong enough to earn points in our rating system.

Without strict exclusion policies, banks leave themselves room to continue financing fossil fuels while publicly claiming to support climate action.

The Green Product Gap

Around 50% of banks in our study offer consumer green products, such as loans for purchasing solar panels. While this is a positive step, we believe all banks should offer at least one green financial product.  Distributed solar and energy storage play a critical role in enhancing grid resilience amid rising climate threats, including extreme heat and wildfires.

Snail’s Pace Progress

There are some signs of progress—certain banks are beginning to shift funding from fossil fuels to renewables. However, the pace of change remains far too slow. Banks must share details about their lending policies and emissions reporting. The lack of science-based climate targets and robust exclusion policies leaves banks with multiple loopholes, allowing them to backtrack on their commitments.

For South Africa’s banks to play a meaningful role in the clean energy transition, they must significantly improve their transparency, lending policies, and climate accountability—before it’s too late.

Don’t Wait for the Banks to Act

You can take action right away and check your bank’s rating, and if it’s among those five “Good” or “OK” banks, you may have an opportunity to remain as a customer and advocate for changes. If your bank rates as “Bad” or “Worst”, you can still speak up and advocate for changes. But, if you’re not satisfied with their responses, you can switch, and we can guide you through the steps.

With these actions, you can be a positive tipping point and get others to advocate for change as well. Consumer actions matter, and it only takes about 10-20% of people to tip the scale.