Wells Fargo and Company: Reducing Climate Impact

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BE IT RESOLVED:  Shareholders request that Wells Fargo adopt a policy for reducing the greenhouse gas emissions resulting from its loan and investment portfolios to align with the Paris Agreement’s goal of maintaining global temperatures substantially below 2 degrees Celsius, and issue annual reports (at reasonable cost, omitting proprietary information) describing targets, plans, and progress under this policy. 

SUPPORTING STATEMENT:  Shareholders recommend the report include, among other issues at board and management discretion, discussion of opportunities to expeditiously reduce the portfolio’s greenhouse gas (GHG) emissions by avoiding investments in high carbon, high risk fossil fuel projects such as coal, Arctic oil and gas, and tar sands.

WHEREAS:  Banks with financial ties to carbon intensive fossils fuel investments face reputational damage, boycotts, divestment, and litigation that adversely affects shareholder value. Wells Fargo lost billions in deposits and banking business and suffered extensive reputational damage from its support of the Dakota Access Pipeline and other similarly controversial projects.  

The Intergovernmental Panel on Climate Change recently released a report finding that "rapid, far-reaching” changes are necessary in the next decade to avoid disastrous levels of global warming; net emissions of carbon dioxide must fall 45 percent by 2030, reaching "net zero" by 2050. 

Banks’ financing choices have a major role to play in promoting these goals. Bank lending and investments make up a significant source of external capital for carbon intensive industries. Every dollar banks invest in new fossil fuel infrastructure slows the transition to a clean energy economy.  

Peer banks have adopted policies reducing carbon in their loan and investment portfolios, including reducing or avoiding investments in extreme fossil fuels. ING adopted a methodology to measure the carbon content of its portfolio and decrease the climate impact of its loans.[1] BNP Paribas and Natixis’ policies phase out business with companies tied to Arctic drilling, oil sands, shale development, and coal energy.[2] The World Bank committed to end upstream oil and gas financing. Over a dozen banks adopted policies to end or substantially reduce financing for Arctic oil and/ or tar sands projects.[3]

In contrast, Wells Fargo has increased investments in the dirtiest fuels ineach of the past three years.[4] Between 2015 and 2017, Wells poured $4.6 billion into financing of extreme fossil fuels like tar sands, Arctic oil, and coal. 

Despite Wells’ broad climate statements, it has not adopted targets, goals, or clear measures to reduce its investments in, or loans to, carbon intensive projects and companies. It joined the “Carbon Principles,” but a recent report found no evidence that adoption of the Principles leads to limiting financing of carbon intensive projects.[5] Wells’ Enterprise Security Risk Management program considers client-based climate risk but does not require carbon reductions. Wells’ participation in other Advisory and stakeholder groups, including the Portfolio Carbon Initiative, does not require and has not resulted in significant reductions of Wells’ fossil fuel investments and loans. In fact, the opposite has occurred.

[1] https://www.eco-business.com/press-releases/ing-reveals-2c-scenario-analysis-method-for-corporate-lending-portfolios/

[2] https://www.upi.com/BNP-Paribas-says-it-will-no-longer-back-oil/4921507715402/

[3] https://www.banktrack.org/campaign/banks_that_ended_direct_finance_for_arctic_oil_andor_gas_projects

[4] http://www.ran.org/wp-content/uploads/rainforestactionnetwork/pages/19540/attachments/original/1525099181/Banking_on_Climate_Change_2018_vWEB.pdf?1525099181, p.6.

[5] https://www.banktrack.org/news/new_report_finds_bank_carbon_principles_did_not_curb_financing_of_coal

Resolution Details

Wells Fargo and Company

Lead Filers: 
As You Sow

Year: 2019

Filing Date: 
November 2018

Initiative(s): Climate Change

Status: Blocked by Company at SEC

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