Wells Fargo and Citigroup Vote to Keep Financing Fossil Fuels | The New Republic

Source: Wells Fargo and Citigroup Vote to Keep Financing Fossil Fuels | The New Republic

In the years since the Paris Agreement on climate change was brokered, Citigroup, Wells Fargo, and Bank of America have poured a combined $789 billion into fossil fuels, including $119 billion last year alone. On Tuesday morning, shareholders in each of those banks tried to change that.

Shareholder resolutions introduced at each of the three banks’ Annual General Meetings this morning proposed that, by the end of this year, the banks adopt “proactive measures to ensure that the company’s lending and underwriting do not contribute to new fossil fuel supplies,” to quote the Citi resolution. In other words, the resolutions demanded that the banks actually act in accordance with the International Energy Agency’s Net Zero Emissions by 2050 Roadmap and the U.N. Environment Program Finance Initiative recommendations to the G20 Sustainable Finance Working Group for credible net-zero commitments. That means stop backing fossil fuel expansion. The resolutions were rejected at all three banks.

…Yet supporters of the resolutions raised today saw the tallies as a win for two reasons. First, any resolution that gets more than 5 percent of shareholder votes is eligible to be refiled next year. These votes met that baseline. And second, altogether, votes for the resolutions represented $65 billion in capital—a sign that a small but significant portion of the legendarily small-c conservative world of Wall Street is starting to sour on fossil fuels.

…“It’s not enough any more to say you have a 2050 target. You need to have a credible plan for achieving those targets,” Ben Cushing, who manages the Sierra Club’s Fossil-Free Finance campaign, told me. “The growing consensus we’ve seen emerge over the last several years is that the only credible way to achieve 1.5 [degrees Celsius] and to align with the net-zero by 2050 pathway is to stop new fossil fuel expansion and new supply, immediately.”

…The resolutions raised this morning were brought by the Sierra Club Foundation at Wells Fargo, Harrington Investments at Citi, and Trillium Asset Management at Bank of America, all members of the Interfaith Center on Corporate Responsibility, a shareholder-advocacy coalition. Along similar lines, the Sisters of St. Joseph of Brentwood (a Catholic women’s congregation) filed a resolution with Citi and Wells Fargo asking the company to provide a report to shareholders outlining how their business respects “internationally recognized human rights standards for Indigenous Peoples’ rights in its existing and proposed general corporate and project financing.” Speaking on behalf of the resolution to Citi’s meeting, attorney and Giniw Collective founder Tara Houska made explicit reference to the company’s financing of Enbridge, the company behind the Line 3 pipeline in Minnesota, which multiple tribes say endangers their water and food supply. That resolution was also voted down, though it garnered 34 percent of the votes at Citi and 26 percent at Wells Fargo.

…Neither the Net Zero Asset Managers alliance nor the Net-Zero Banking Alliance—both under the GFANZ umbrella—takes a position on specific shareholder resolutions.

…Blackrock, State Street, and Vanguard played a large, albeit quiet, role in today’s votes. These “big three” asset managers, which own 20 percent, on average, of America’s six biggest banks, are top shareholders in Citi, Bank of America, and Wells Fargo. They also own 20 percent of the average company listed on the S&P 500 index….Spokespeople for Blackrock and Vanguard each said via email that they don’t comment on specific votes as a matter of policy. 

The fact that asset management companies have this much power in deciding what new fossil fuel development gets financed speaks to just how little states are doing to rein in fossil fuel spending directly. The U.S. government has a bottomless chest for wars and a sprawling administrative capacity to deport migrants and lock people up for misdemeanor drug charges. Absent more stringent regulations, getting banks to stop financing the destruction of the planet entails asking three companies that control one-fifth of the average S&P 500-listed firm to tell them to cut it out. Judging by the recent votes, though, this strategy could take a while.
Kate Aronoff @KateAronoff