At least three big banks to continue fossil fuel financing as shareholders fight for net-zero goals

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It’s annual shareholders meeting season for banks, many of which face questions over fossil fuel financing. Three big banks—Citigroup, Wells Fargo, and Bank of America—held their meetings on Tuesday and each bank had shareholders vote on climate finance resolutions proposed by groups like the Sierra Club and Harrington Investments. None of the measures passed, though the votes of 12.8% for Citi, 11% for Wells Fargo, and 11% for Bank of America show that shareholders have a vested interest in fighting climate change. Because each proposal crossed the 5% threshold of approval, all three can be refiled next year. “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,” Jason Opeña Disterhoft, senior climate and energy campaigner at Rainforest Action Network, said in a statement.

“A critical mass of investors affirmed that business-as-usual expansion of fossil fuels is incompatible with a 1.5 degrees C world and threatens their portfolios overall,” Disterhoft continued. “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.” Statements from other activists and advocates echoed that hopeful sentiment, yet publications like Politico chose to frame the vote as a question of “woke capitalism,” as if earnestly fighting climate change is some type of passing trend. Bloomberg seemed to at least get to the heart of the problem, quoting Citigroup CEO Jane Fraser cautioning against pulling support of fossil fuel companies. “It’s not feasible for the global economy or for human health or livelihoods to shut down the fossil-fuel economy overnight,” Fraser said. “The transition needs to be accelerated, but it also needs to be managed to minimize the shock to our economy and our communities.”

Advocates for substantial change in the banking industry are begging and pleading with banks to do the right thing, but it’s shareholders who have the ability to counteract the Frasers of the sector. And there are indeed some major players who want banks to adopt the right kinds of policies, such as these proposals, which would’ve forced the likes of Citi, Wells Fargo, and Bank of America to take “available actions to help ensure that its financing does not contribute to new fossil fuel supplies that would be inconsistent with the IEA’sNet Zero Emissions by 2050 Scenario.” A group of 32 philanthropists whose asset managers hold stakes in major banks signed a letter in support of the proposals, including John Hunting, Basso Capital Management founder Howard Fischer, and president of the Sagner Family Foundation, Deborah Sagner.

Given the way these initial votes shook out, those same philanthropists are bound to react to their wishes being ignored by the likes of BlackRock, Fidelity, and others. Banks that have yet to hold their annual shareholder meetings include Goldman Sachs, JPMorgan Chase, and Morgan Stanley. The companies face similar pressure to adopt policies that prioritize climate change as well as proposals benefitting marginalized customers like the ones proposed at Citi and Wells Fargo urging the companies to internationally recognize Indigenous communities’ right to Free, Prior, and Informed Consent (FPIC). FPIC policies could potentially prevent banks from sinking money into projects that actively harm Indigenous communities, like Enbridge’s Line 3 pipeline, which was financed by Citi, Wells Fargo, and Bank of America, along with numerous other financial institutions.