- Wells Fargo has signed a deal to buy 150 megawatts of solar power from Shell Energy, Reuters and The Washington Post reported. The purchase price was not disclosed.
- The purchase shows progress toward clean energy goals for the San Francisco-based lender, which has financed $198 billion for fossil fuel companies and projects since the Paris climate agreement was signed in 2015, according to data from the Rainforest Action Network. That total trails only JPMorgan Chase worldwide, the nonprofit said.
- Several other banks have promised a greener lending profile over the past six months. Goldman Sachs in December pledged $750 billion over the next 10 years toward companies and projects focused on renewable energy, sustainable transportation and affordable education. Barclays promised in March to reduce the carbon emissions it creates or funds to net zero by 2050. And Citi vowed in April to stop providing financial services to thermal coal-mining companies by 2030.
The 150 megawatts, purchased from three locations in Virginia and one in California, would meet about 8% of Wells Fargo’s global energy needs, the bank said, according to The Washington Post. The California contract will last seven years, while the Virginia deal is five months shorter.
However, it is worth noting Shell Energy is a subsidiary of one of the world’s leading fossil fuel producers, Royal Dutch Shell. The conglomerate told investors in 2017 that it would spend $1 billion to $2 billion per year through 2020 to develop a clean energy business. The company is on track to fall well short of that, just months ahead of the self-imposed benchmark, The Guardian reported.
Wells Fargo pledged in 2016 to cover all of its energy needs with renewables. It bought enough renewable-energy certificates to reach that target in 2017. The bank said it was replacing the certificates with direct, long-term purchases of newly constructed renewable power from areas where Wells Fargo has a footprint, according to the Post.
"As the [energy] sector has evolved, so has our business," E.J. Bernacki, the bank’s spokesman for sustainability and corporate responsibility, said, according to the Post. The bank's equity investments represented 10.3% of all solar and wind generation capacity nationwide at the end of last year, Bernacki said.
Additionally, the bank has "a pipeline of additional transactions that we’re hoping to bring to closure," Curt Radkin, Wells Fargo’s senior vice president and corporate properties sustainability strategist, said, according to the Post.
Banks are increasingly finding responsible investment is not just good PR, it's good business. The global responsible loans market totaled $111.5 billion in July 2019, a 40% increase from a year earlier, according to S&P Global Ratings.