Shareholder advocate As You Sow, along with several investors, recently filed climate-focused resolutions with a large segment of the U.S. banking industry, including JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, and Citigroup.
As You Sow is joined by investors such as Mercy Investment Services, Arjuna Capital, Boston Trust Walden, Presbyterian Church USA, and Boston Common Asset Management, among others.
As You Sow says investor concern is growing regarding banks’ role in contributing to the climate crisis through their financing. Investors are asking these banks — some of the largest funders of fossil fuels — to immediately take tangible steps to measure, disclose, and reduce the greenhouse gas emissions associated with their financing, including in particular their financing of fossil fuels.
The United States’ Commodity Futures Trading Commission recently acknowledged that climate change poses a major risk to the stability of the US financial system and to its ability to sustain the American economy.
Some banks are beginning to take noteworthy action. Last summer, Energy + Environmental Leader reported how Morgan Stanley became the first US bank to both commit to measure and disclose its financed emissions through the Partnership for Carbon Accounting Financials (PCAF) and to set a target to achieve net-zero financed emissions by 2050.
Bank of America and Citigroup joined in committing to PCAF, but have yet to indicate a commitment to reduce emissions to net zero. JPMorgan announced a Paris-aligned financing commitment, but has not indicated if, how, or when it will disclose its financed emissions, leaving investors in the dark on the bank’s progress. Unfortunately, Wells Fargo and Goldman Sachs have neither committed to disclose their emissions nor signaled an intent to align with Paris goals, falling behind their peers.
The Office of the Comptroller of Currency (OCC) has reacted to banks’ progress in limiting climate risk by proposing a rule that seeks to protect fossil fuel companies from climate-related financing limitations.
As You Sow says the OCC’s proposed rule is reactive and inappropriate. The organization posits that banks have begun applying common sense risk assessment to limit financing of activities that create risk and destroy value. OCC’s attempt to meddle in this process goes against sound economics at a time when systemic climate risks are poised to wreak havoc on our economy.