Wall Street’s climate semantics skew votes on fossil fuel funding

Content of the article

(Bloomberg) – The environmental group that drafted a key proposal against fossil fuel funding says the banks’ pushback it targets contributed to the resolution’s failure.

The Sierra Club lobbied Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley to stop funding new fossil fuel supply projects, including coal-fired power plants, and approved proposals similar for Citigroup Inc. and Bank of America Corp. resolutions received more than 15% shareholder support in last week’s vote.

Advertisement 2

Content of the article

As banks were urged by the Sierra Club and other investors to end funding for new fossil fuel developments, the industry pitched the idea as a demand to immediately cut funding for all oil projects, gas and coal companies, said Ben Cushing, the Sierra Club’s Washington-based campaign manager.

“People who confuse these things know best and are smart enough to tell the difference,” he said in an interview. “It’s hard to see how this isn’t a deliberate and willful misrepresentation.”

Just under 13% of Citigroup shareholders voted in favor of the Sierra Club measure, according to a preliminary tally at the company’s annual meeting. At Bank of America and Wells Fargo, the proposals each received 11% of votes in favor.

Advertisement 3

Content of the article

In trying to explain to shareholders why she thought the resolution should be defeated, Citigroup Chief Executive Jane Fraser said it “is not possible for the global economy or for human health or the means to shut down the fossil fuel economy overnight”.

Read more: Banks hit for ‘Woke’, Marxist agendas as annual meetings go MAGA

Wells Fargo told shareholders that passing the resolution “would effectively prevent us from offering general purpose loans to the oil and gas industry,” while Bank of America CEO Brian Moynihan said the bank would continue monitor client relationships and portfolios to facilitate the transition.

“We are working with CEOs and other companies around the world to facilitate this transition,” he said. “We will continue to do so.”

Advertisement 4

Content of the article

The Sierra Club, which has existed since the late 19th century and ranks among the most prolific activists on issues related to sustainable finance, said its demand to stop funding new projects was in line with the Initiative’s recommendations. funding from the United Nations Environment Program and the International Energy Agency’s Scenario for Net Zero Emissions by 2050. In a May 2021 report, the IEA concluded that, to avoid a climate catastrophe, there should be no investment in new fossil fuel supply projects.

Wells Fargo said in its proxy statement that the IEA statement is “just one of several scenarios, and these other scenarios do not make the same assumption.”

For Cushing, while the level of absolute support for the banking proposals was low, he is hopeful that progress is being made. This is because any resolution that gets more than 5% support can be resubmitted the following year, and any resolution with more than 10% support is hard for management to ignore.

Advertisement 5

Content of the article

And this year’s resolutions “are really the first of their kind” because they want specific limitations on loans and subscriptions, rather than asking for targets or disclosures, he said.

At Credit Suisse Group AG, just over 20% of shareholders backed an attempt to force the Swiss bank to disclose more about its efforts to tackle climate change and cut fossil fuel financing. While the proposal, which was submitted by the Ethos Foundation, ShareAction and 11 institutional shareholders, was rejected, Credit Suisse noted that ESG reporting will become mandatory in its home market from 2024.

In London, at the shareholders’ meeting of HSBC Holdings Plc, executives struggled on Friday to talk about climate protesters singing a slightly modified version of Abba’s “Money, Money, Money.” Last year, bank shareholders backed a resolution to phase out all coal and thermal coal mining financing by 2040, and to share detailed medium- and long-term plans to phase out its financing to fossil fuels.

Barclays Plc and Standard Chartered Plc are next, with their annual shareholder meetings scheduled for later this week.

©2022 Bloomberg LP

Bloomberg.com

Advertisement

comments

Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. See our Community Guidelines for more information and details on how to adjust your email settings.

About Brandon A. Hood

Check Also

The Swiss National Bank has started unloading its largest holdings in US stocks, incl. Apple, Microsoft, Amazon, Alphabet, Meta

He bought Tesla anyway, which is down 52%. He suffered massive casualties. And there’s a …