PNC Investors Support Climate Change Risk Management

PNC Bank

by | Apr 25, 2013

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PNC BankSome 22.8 percent of PNC Financial shareholders representing more than $5.4 billion dollars have voted in support of a resolution asking the company to assess its exposure to climate change in its lending, investing and financing activities.

This is the first time that shareholders have been able to vote on this topic because of changes in US Securities Exchange Commission policies. An SEC ruling in February forced PNC to keep the shareholder resolution on the proxy ballot. The resolution also proposed that PNC assess the greenhouse gas emissions in its lending portfolio.

Support votes over 20 percent are considered a strong mandate from investors, and 23 percent is “extraordinary” for a first-time resolution, according to Boston Common Asset Management, the lead filer of the resolution.

Other filers were were: Catholic Health East, Domini Social Investments, Friends Fiduciary Corporation, Sisters of Mercy and Walden Asset Management.

Investors are concerned that a lack of strategic management of climate change risk in lending and financing decisions may expose a bank to significant reputational, financial and operational risks, says Meredith Benton, client portfolio manager at Boston Common Asset Management.

Investors are also concerned that PNC’s environmental brand might be damaged by a lack of attention to climate concerns, Benton says. PNC, which has trademarked the term “Green Branch,” has put significant effort into developing energy efficient branches.

Last month, New York listed climate change in the state’s bond offerings, warning investors that climate change poses a long-term risk to the state’s financial health, citing Hurricane Sandy and tropical storms Irene and Lee, which caused widespread damage and economic losses.

A global climate investment index released last December by the Asset Owners Disclosure Project found the majority of funds don’t recognize the investment challenges that climate change presents. Not one US firm ranked in the top 10 of the index, which measures how the world’s biggest investors, including pension funds, are managing climate risk.

Investors have filed 365 shareholder resolutions this year on environmental and social issues, with 38 percent of the proposals focusing on climate change, energy and corporate sustainability strategies, according to a March preview of the 2013 proxy season by shareholder advocacy group As You Sow.

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