- Shareholders at Citi, Wells Fargo and Bank of America voted down climate change proposals at their respective annual general meetings Tuesday.
- Citi’s proposal, which would have limited the bank from lending and underwriting new oil and gas projects, garnered 12.8% of the vote. Similar proposals at Wells Fargo and Bank of America each received 11% of shareholder support.
- Similar measures will be up for a vote in the coming weeks at three more of the nation’s top financial institutions: JPMorgan Chase, Goldman Sachs and Morgan Stanley.
Shareholder votes are nonbinding but may herald coming change, given enough support. A shareholder proposal last year that would have forced Goldman to publish a report on how mandatory arbitration affects its staff and workplace narrowly failed, with 49% backing, and the bank rejected it. But Goldman reversed course in June, agreeing to review the issue.
Likewise, Citi agreed in October to undergo a racial audit, months after a shareholder proposal on the matter garnered 38% support.
Tuesday's shareholder proposals come as the banking industry has seen a record number of climate-focused petitions aiming to pare lending to the fossil-fuel industry, according to Politico. The boost in climate proposals follows the Securities and Exchange Commission’s decision in December to broaden the types of issues that shareholders are allowed to raise at annual meetings.
The climate change resolutions were submitted by the Sierra Club Foundation at Wells Fargo, Harrington Investments at Citi and Trillium Asset Management at Bank of America.
Fossil-fuel financing from the world’s 60 largest banks reached $4.6 trillion in the six years following the adoption of the 2015 Paris Agreement, according to a report by the Rainforest Action Network.
Fossil-fuel financing from the world’s largest financial institutions reached $742 billion in 2021 alone, according to the environmental group.
JPMorgan Chase, Citi, Wells Fargo and Bank of America accounted for 25% of all fossil-fuel financing identified over the past six years, according to the report.
While climate-focused shareholders want to see financial institutions’ lending practices line up with the Paris Agreement, banks say it’s not possible to make a full stop and have instead made commitments tied to offsetting their fossil-fuel financing activities.
As part of their membership in the Net-Zero Banking Alliance, Citi, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America and Wells Fargo have each committed to reaching net-zero financed emissions by at least 2050.
During her bank’s annual meeting on Tuesday, Citi CEO Jane Fraser told shareholders it’s “not feasible for the global economy or for human health or livelihoods to shut down the fossil-fuel economy overnight.”
“The transition needs to be accelerated, but it also needs to be managed to minimize the shock to our economy and our communities,” she said, according to Bloomberg.