Members of the Interfaith Center on Corporate Responsibility (ICCR) a coalition of over 300 global faith-based and values-based institutions have filed two shareholder proposals at six of the nation’s top banks calling on them to reduce their financing of fossil fuels. The following article was published in the March-April 2023 issue of NewsNotes.
The Maryknoll Sisters, a member of ICCR, were the co-filers of a shareholder proposal at JPMorgan Chase, which is considered “the world’s worst banker of climate chaos” according to a recent report authored by Rainforest Action Network, the Sierra Club, and others.
Cathy Rowan, the representative to the ICCR for the Maryknoll Sisters stated: “Even though JPMorgan Chase, along with the other major US banks, committed to align its financing with the Paris Agreement, it has provided more financing to the fossil fuel industry than any other bank since the Paris Agreement was signed in 2015. The resolution we co-filed with the Sierra Club Foundation calls for the bank to align its actions with its promises.”
The other banks which received shareholder proposals include Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, and Wells Fargo. These are among the top fossil fuel funders in the world – all headquartered in the U.S. and leading players in the group of 60 banks that have invested a combined $4.6 trillion into the fossil fuel industry over the past six years after the Paris Climate Agreement.
“In order to avert the worsening impacts of the climate crisis, we must stop the expansion of fossil fuels,” said Dan Chu, Executive Director of the Sierra Club Foundation, the lead group in filings at JPMorgan Chase, Wells Fargo, Morgan Stanley, and Goldman Sachs. “All major U.S. banks continue to finance billions of dollars for new coal, oil, and gas projects every year. Such financing undermines the banks’ net zero commitments and exposes investors to material risks. These shareholder resolutions simply ask banks to align their promises with their actions and to adopt policies to phase out the financing of new fossil fuel development. We have actively engaged with bank leadership so they are clear about what investors expect from their banks, and we anticipate strong levels of support this spring from fellow investors.”
Similar shareholder proposals were filed at these banks in 2022 and received between 8-13% support at annual meetings. The new 2023 proposal clarifies that they are not calling on banks to abruptly terminate client relationships, but to commit to a time-bound phase-out of new fossil fuel exploration while supporting their low carbon transition in a manner that is both credible and verified.
“The banks’ objection to the language of last year’s proposal was that it would cut off clients immediately and prevent banks from financing the net-zero transition, insofar as they couldn’t support companies that may have low-carbon transition plans but are still involved in oil and gas development,” said Paul Rissman of the Sierra Club Foundation. “This year’s proposal encourages banks to finance companies that are certified by a credible third party to be on a net zero pathway while maintaining that financing for new fossil fuels is incompatible with the banks’ climate commitments.”
Said Kate Monahan of Trillium Asset Management, which led the filing at Bank of America, “The International Energy Agency’s warnings are clear – we will not be able to achieve the Paris Agreement’s goal of limiting warming to 1.5 degrees if banks continue to finance new fossil fuel exploration and development. Bank of America has publicly committed to the Paris Agreement but continues to finance fossil fuel expansion with no phase-out plan, exposing itself to accusations of greenwashing and reputational damage. By continuing to fund new fossil fuels, Bank of America and others are taking actions with potentially catastrophic consequences.”
With these new shareholder resolutions investors remind banks of the risks of failing to meet their own climate targets. By making exaggerated environmental claims – a practice called greenwashing – banks can risk incurring costly fines from regulators. They also risk losing capital from central banks that often come with more stringent climate restrictions.
“The financial services sector has an important role to play in addressing the growing climate crisis,” Danielle Fugere, President of As You Sow, part of the group of investors who led these filings.
Faith in action
If you own shares in Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley or Wells Fargo, please vote FOR the shareholder proposal calling for Time-Bound Phase-Out of Financing of New Fossil Fuel Exploration and Development when you get your proxy ballot.