Big-bank shareholders vote down climate-change proposals

Shareholders at three of the nation’s four largest banks on Tuesday voted down proposals that would have pushed their management team to more aggressively curtail lending to new fossil-fuel projects.

The first-of-their-kind proposals were among the more closely watched measures this proxy season, as investors weighed whether environmental commitments made by banks in recent years go far enough to aid in slowing down climate change.

The proposals taken up Tuesday received support from 12.8% of the voting bloc at Citigroup’s annual shareholder meeting and 11% at Bank of America’s and Wells Fargo’s gatherings, based on preliminary results. 

JPMorgan Chase, Citigroup, Wells Fargo and Bank of America provided nearly $1.2 trillion in financing to fossil fuel-companies between 2016 and 2021, according to a recent report by environmental groups.


While the early results fell short of what some activists had been hoping for in the proposals’ first year of consideration, the measures did clear certain thresholds to qualify for resubmission in 2023.

“These resolutions are unprecedented; this situation generally produces smaller votes the first time out,” said Paul Rissman, a board member at the Sierra Club Foundation, which had submitted the proposal to Wells Fargo’s shareholders.

Similar proposals are scheduled to be considered in the weeks ahead at the annual meetings of JPMorgan Chase, Goldman Sachs and Morgan Stanley, along with Bank of Montreal, Toronto-Dominion Bank and Royal Bank of Canada.

The votes took place after climate activists organized protests outside of the banks this week. 

On Tuesday, some protesters organized outside of Citigroup’s headquarters. Others gathered outside of the homes of three Bank of America executives. And 20 protesters were arrested on Monday after getting inside Wells Fargo’s San Francisco headquarters and chaining themselves to the bank’s iconic wagon. 

At issue inside the shareholder meetings was how far banks are willing to go in urging their energy clients to go green. 

Bank of America last year set a goal of hitting net-zero emissions before 2050, and the Charlotte, North Carolina, bank is financing some changes for energy producers, CEO Brian Moynihan said Tuesday. But he added that their clients’ business decisions are ultimately not up to the bank.

“We will work with our clients to help make that transition take place, but at the end of the day it is their transition,” Moynihan said at the shareholder meeting.

Climate activists took issue with characterizations by some bankers that their proposals were calls for divestment from the fossil-fuel industry. They pressed banks to better align their lending businesses with the goals set out in the 2016 Paris climate accords, an international treaty on climate change. 

Bank executives who urged shareholders to vote against the proposals said they were working with their energy clients to make the necessary transitions. In some cases, executives said that the shareholder measures were not warranted given soaring gas prices in today’s energy market.

The four largest banks in the U.S. — JPMorgan Chase, Citi, Wells Fargo and Bank of America — provided nearly $1.2 trillion in financing to fossil fuel-companies between 2016 and 2021, according to a recent report by Rainforest Action Network and other environmental groups.

In a filing ahead of Wells Fargo’s annual meeting, the company’s board argued that the shareholder proposal was not “reasonable based on current energy usage” and said that it wanted to ensure “ongoing participation in financing the new capabilities and resources Oil & Gas companies will need for the future.”

Wells CEO Charlie Scharf said Tuesday that the $1.9 trillion-asset company is “focused on helping our customers as they transition to a low-carbon future.” 

Many Wells Fargo customers in the sector are “investing significantly in the development of technologies and decarbonization strategies,” and the San Francisco bank wants to help them in that transition, rather than cutting ties, Scharf said.

“We’ve favored engagement over divestment,” Scharf said.

But Loren Blackford, who chairs the Sierra Club Foundation’s investment committee, said that the shareholder proposal “is not asking for divestment” and would not prevent Wells Fargo from helping oil and gas companies with the transition.

“The proposed policy is needed to ensure that shareholders’ long-term interests are protected and that the company’s net-zero commitment is aligned with the Paris Agreement,” Blackford said.

Wells Fargo’s “continued financing of new fossil-fuel development is incompatible” with its goal to achieve net-zero greenhouse gas emissions by 2050, she said.

Blackford also argued that financing of new projects “exposes Wells Fargo shareholders to material risks.”

She pointed to the potential for credit losses, higher capital requirements from regulators and reputational risk in connection with accusations of “greenwashing,” which refers to companies expressing concern about the environment as a way to provide cover for harmful activities.

Citi faced a similar proposal, which was submitted by investment managers Harrington Investments in Napa, California, and Boston Common Asset Management in Boston, Massachusetts.

In a supporting statement in Citi’s proxy filing, Harrington and Boston Common argued that “a change in policy is needed” in order to “close the gap between [Citi’s] words and actions” when it comes to climate change.

 Citi countered that it has already made an appropriate commitment, pointing to its 2021 pledge to achieve net-zero emissions by 2050, which Jane Fraser announced on her first day as CEO last year, and the firm’s recently published 2030 emissions-reduction goals for its energy and power loan portfolios.

At Citi’s annual meeting, one shareholder wanted to know if the New York megabank had declared a “climate emergency” yet. Fraser used the moment as an opportunity to reiterate the “urgent need for collective action” on climate change.

“Meeting this commitment will require unprecedented partnership” with clients and governments as well as “strong public policy framework,” Fraser said. “We are committed to playing an active role in the fight against climate change.”

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