{"id":2283,"date":"2023-04-30T07:10:20","date_gmt":"2023-04-30T11:10:20","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/big-banks-hold-the-purse-strings-for-fossil-fuels-theyre-not-giving-them-up\/"},"modified":"2023-04-30T07:10:21","modified_gmt":"2023-04-30T11:10:21","slug":"big-banks-hold-the-purse-strings-for-fossil-fuels-theyre-not-giving-them-up","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=2283","title":{"rendered":"Big Banks Hold the Purse Strings For Fossil Fuels. They’re Not Giving Them Up."},"content":{"rendered":"
\n
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Big Banks and Big Oil go hand-in-hand, and earlier this month, investors signaled they have little interest in changing the status quo\u2014despite pressure from climate activists for financial institutions to stop funding new oil and gas projects.\u00a0<\/p>\n

Investors in\u00a0<\/strong>
\n Bank of America
\n (ticker: BAC),
\n Citigroup
\n (C),
\n Goldman Sachs
\n (GS), and
\n Wells Fargo
\n (WFS) gave tepid support to shareholder resolutions calling for the lenders to phase out financing for new fossil fuel expansion. The votes were down year-over-year, winning less than 10% support\u2014a result the environmental organization Sierra Club called alarming.\u00a0\u00a0<\/p>\n

\n

\u201cGiven the state of the climate crisis, it is alarming that the world\u2019s largest investors don\u2019t seem to be recognizing the systemic threat that climate change poses and aren\u2019t taking sufficient action,\u201d Ben Cushing, campaign director of the Sierra Club\u2019s fossil-free finance campaign, told Barron\u2019s.<\/em>\u00a0<\/p>\n

The large asset managers and pension funds \u201cwho have a fiduciary duty to protect and maximize investor returns aren\u2019t adequately prioritizing the long-term systemic risks that climate change poses to their portfolios,\u201d he said.<\/p>\n

Bank of America, Citigroup, Goldman Sachs, and Wells Fargo had recommended shareholders vote against the proposal.<\/p>\n

Bank of America said \u201cthe business restriction and policy requested by the proposal is unnecessary in light of our commitment to help finance the transition to net zero emissions, our risk management programs and policies, and our broader net zero commitment,\u201d according to its proxy statement.<\/p>\n

In its proxy statement, Citi said its climate strategy is about investment rather than divestment and includes a \u201ccommitment to engage with our clients to help finance their transition\u201d and \u201cincreased financing and support of climate solutions.\u201d<\/p>\n

Goldman Sachs, meanwhile, said the firm does \u201cnot believe in placing limits on financing to producers because, among other things, we do not believe it will result in either reduction in emissions from, or demand for, fossil fuels,\u201d according to its proxy statement.<\/p>\n

Wells Fargo said in its proxy statement that the bank doesn\u2019t believe restricting financing to the oil and gas sector \u201cis reasonable given the significant adverse impact that curtailing financing to this sector would have on the U.S. and world economies\u201d and that \u201cthis approach is counterproductive at a time when many of these companies are investing in their own climate transitions, pursuing emissions reductions in their operations, and developing new clean energy solutions.\u201d<\/p>\n

Heidi Welsh, executive director of the Sustainable Investments Institute, which tracks U.S. shareholder resolutions, said proposals need about 20% support to gather steam and that the low result reflected \u201ca tragedy of short-termism\u201d on the part of investors.<\/p>\n

Cushing said the scientific consensus is clear that new fossil fuel expansion isn\u2019t compatible with getting to net-zero greenhouse gas (GHG) emissions by 2050 and keeping global warming below the important threshold of 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, above preindustrial levels.\u00a0<\/p>\n

The latest IPCC report warned that global emissions aren\u2019t falling at the rate and speed needed to stave off the catastrophic effects from a quickly warming planet\u2014and that Earth is on pace to eclipse the 1.5-degree threshold in the first half of the 2030s.<\/p>\n

\u201cHumanity is in a deep hole and the first rule of being in a hole is to stop digging,\u201d Cushing said. \u201cIt is deeply disappointing that investors aren\u2019t voting to simply ask banks to adopt policies to align with the commitments they have already made.\u201d<\/p>\n

A recent report found that the world\u2019s biggest banks funneled billions of dollars into boosting fossil-fuel production capacity\u00a0<\/strong>in 2022, despite growing calls to scale back lending in response to global warming.<\/p>\n

Investors at Bank of America, Goldman Sachs, and Wells Fargo also voted on a first-time resolution filed by shareholder representative As You Sow asking them to provide climate transition plans for achieving their 2030 net-zero GHG emissions reduction goals. That measure fared slightly better and was endorsed by about 30% of shareholders.<\/p>\n

Danielle Fugere, president and chief counsel at As You Sow, said she was pleased with the result.\u00a0<\/p>\n

\u201cRoughly a third of investors supporting the proposal indicates that the companies should be responsive,\u201d she said. \u201cIt\u2019s a first-year proposal, so we think this is very strong.\u201d<\/p>\n

A third proposal, filed by New York City Comptroller Brad Lander and three of the New York City Retirement Systems, called on Bank of America, Goldman Sachs,
\n JPMorgan Chase
\n (JPM), and
\n Royal Bank of Canada
\n (RY) to disclose absolute GHG emissions targets for 2030, as opposed to emissions intensity.\u00a0\u00a0<\/p>\n

Absolute targets aim to reduce GHG emissions by a set amount, while an intensity target is a metric that sets an organization\u2019s emissions target relative to an economic or operational variable, according to the Environmental Protection Agency.<\/p>\n

That proposal received low support from the investors of the three banks that held meetings last week: 11.5% at Bank of America, 12% at Goldman Sachs, and 17.2% at RBC.<\/p>\n

JPMorgan Chase, the biggest U.S. bank and a significant funder of fossil fuels, and Morgan Stanley (MS) are slated to hold their shareholder meetings in May.\u00a0<\/p>\n

JPMorgan Chase\u2019s investors will vote on all three climate proposals, while Morgan Stanley\u2019s shareholders will consider the resolutions regarding fossil fuel expansion and climate transition plans. Both banks have recommended that shareholders vote against the proposals.<\/p>\n

Write to Lauren Foster at lauren.foster@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Big Banks and Big Oil go hand-in-hand, and earlier this month, investors signaled they have little interest in changing the status quo\u2014despite pressure from climate activists for financial institutions to stop funding new oil and gas projects.\u00a0 Investors in\u00a0 Bank of America (ticker: BAC), Citigroup (C), Goldman Sachs (GS), and Wells Fargo (WFS) gave tepid […]<\/p>\n","protected":false},"author":1,"featured_media":2284,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-2283","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nBig Banks Hold the Purse Strings For Fossil Fuels. 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