This morning, shareholders at Citi, Bank of America, and Wells Fargo voted 12.8%, 11%, and 11%, respectively, in support of groundbreaking resolutions pushing the banks to end their support for new fossil fuel development. Any resolution that receives at least 5 percent of the vote is eligible to be refiled next year, and anything that receives 10 percent or more is considered difficult for a company to ignore.
In addition, 34% of shareholders at Citi and 26% at Wells Fargo voted in favor of resolutions urging the banks to improve their policies relating to Indigenous Peoples rights, including the internationally recognized right to Free, Prior and Informed Consent (FPIC). In recent years, banks have been complicit in high-profile violations of Indigenous Peoples rights to FPIC by funding numerous new fossil fuel projects, such as the Line 3, Dakota Access and Trans Mountain pipelines.
“Today’s results not only show that a growing body of investors at top-level global institutions are listening to the voices of Indigenous peoples, it also reinforces the critical nature of frontlines land defenders & impacted communities having a seat at the table. I intervened this morning as a soon-to-be mother facing numerous criminal charges for trying to protect my people’s treaty lands from Enbridge’s Line 3 pipeline. We must keep fighting for the water, for our children to be heard.” Tara Houska, Giniw Collective.
In recent years, shareholder resolutions filed at the top US banks have called for firms to disclose the scale of their financed emissions and to set long-term climate targets. This year’s first-of-their-kind resolutions went further by calling on the banks to put credible plans in place to achieve those long-term targets. Specifically, the resolutions call for banks to adopt policies by the end of 2022 committing to proactive measures to ensure that their lending and underwriting do not contribute to new fossil fuel development.
The resolutions were publicly supported by New York State Common Retirement Fund, the third largest pension fund in the country, as well as three of New York City’s pensions and Rhode Island’s and Seattle’s funds. However, the vote totals suggest that major asset managers like BlackRock, Vanguard, State Street, and Fidelity — which are by far the largest shareholders of the big banks, and are therefore in a position of unique responsibility on important votes – failed to support them, despite their own net-zero commitments and pledges to use their shareholder power to advance climate action.
“It’s deeply disappointing that, once again, asset managers like BlackRock and Vanguard have failed to put their money where their mouth is and use their immense power to hold banks accountable to their climate pledges. The rhetoric coming out of these big investors about climate leadership and engaging with their clients on a clean energy transition is worthless if it’s not paired with meaningful accountability for clients that are clearly not interested in making that transition a reality,” said Sierra Club Fossil-Free Finance Campaign Representative Adele Shraiman. “Nevertheless, the fact that this first-of-its-kind effort gained as much support as it did should send a clear signal that the effort to push Wall Street to deal with its climate problem isn’t going anywhere. Big banks have a responsibility to address their massive contribution to the climate crisis and protect their shareholders from climate risk by aligning their policies with their own net-zero commitments and ending support for fossil fuel expansion. The pressure on them to do so from shareholders and the public is only growing stronger.”
“Some shareholders, like New York State and City pensions, sent a clear message today: fossil banks need to align their financing with climate science. Citi, Wells Fargo and Bank of America management need to quickly move to cut financing for expansion of fossil fuels, said Richard Brooks Climate Finance Director with Stand.earth. “But it’s pretty clear that big asset managers like Blackrock, refuse to reckon with reality. You can’t make net-zero commitments and pledge to use your shareholder power to reach these and then not vote in favor of climate-related resolutions at the biggest fossil fuel financing banks on the planet.”
Nelton Yankur, President of the Achuar Nation in the Peruvian Amazon, said, “Our collective fight to defend our lands and prevent oil drilling is not just a fight to protect our own communities, but to protect the entire planet from the climate crisis we all face. The banks that finance the extraction and expansion of oil in the Amazon are complicit in a genocide against indigenous peoples and in the perpetuation of a climate crisis that is an existential threat to all of us. All banks, including Citigroup, must commit to ending financing for the exploitation of fossil fuels in the Amazon and in the world in general.”
“A commitment to end financing for fossil fuel expansion is the bare minimum, and Indigenous leaders and shareholders alike are fed up with big banks’ greenwashing. Despite the scientific consensus that fossil fuel expansion needed to end last year, Citi is the top financier of oil and gas in the Amazon. Banks that continue to pour billions into razing the rainforest, spewing oil into local water supplies, and destroying the climate can’t call themselves climate leaders.” said Pendle Marshall-Hallmark, Climate and Finance Campaigner at Amazon Watch.
“Today’s votes put the question of fossil fuel expansion firmly and irrevocably on the table for three of the world’s top four fossil banks,” said Jason Opeña Disterhoft, Senior Climate and Energy Campaigner at Rainforest Action Network. “A critical mass of investors affirmed that business-as-usual expansion of fossil fuels is incompatible with a 1.5°C world and threatens their portfolios overall. Ending fossil expansion is a matter of when, not if: Citi, Wells Fargo and Bank of America must recognize this direction of travel and make ending fossil expansion a precondition for financing for all clients.”
Each of today’s AGMs were also targets of boisterous street protests at their headquarters, though the meetings themselves were held online. On Sunday in Charlotte, a coalition of faith-based and climate activists staged demonstrations at the homes of three top Bank of America executives to implore them to end Bank of America’s massive financial backing of Formosa Plastics’ giant new petrochemicals complex in the ‘Cancer Alley’ region of Louisiana. In San Francisco yesterday, 20 climate activists were arrested for chaining themselves to a horse carriage display inside the headquarters of Wells Fargo, and today hundreds of people are attending colorful protests in downtown Charlotte and Manhattan at the headquarters of Bank of America and Citi.
“Most state treasurers rely on proxy advisors to recommend how their pension funds vote on shareholder resolutions. We’ve seen some bold treasurers and comptrollers override those recommendations and vote according to proxy voting guidelines that have more teeth when it comes to systemic climate risks. We expect more from our public officials – they all have the tools they need to exercise their fiduciary duty of care and loyalty,” said Mary Cerulli, founder Climate Finance Action.
Over 2016-21, Citi, Wells Fargo and Bank of America were the #2, #3 and #4 fossil banks in the world, responsible for $285 billion, $272 billion and $232 billion in lending and underwriting to fossil fuel companies, respectively. Citi’s top two fossil clients over 2016-21 were Exxon, Occidental, Saudi Aramco and Enbridge; Wells Fargo’s were Pioneer, Diamondback, and Marathon Petroleum; and Bank of America’s were Exxon, Occidental, and Marathon Petroleum.