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MEMO: As Shareholder Season Kicks Off, Big US Banks Face Growing Climate Pressure

Bank of America, Wells Fargo, and Citi first to face climate resolutions on Tuesday 4/26
WASHINGTON -

As big banks are gearing up for their annual shareholder meetings, they are facing unprecedented pressure on climate change. For the first time, the six biggest US banks – Bank of America, Wells Fargo, Citi, JPMorgan Chase, Morgan Stanley, and Goldman Sachs – are all facing votes on shareholder resolutions pushing them to end their support for new fossil fuel development.

In recent years, shareholder resolutions filed at the top US banks have called for firms to disclose the scale of their financed emissions and to set long-term climate targets. Banks have largely begun to take these preliminary steps –  all the major US banks have committed to achieving net-zero financed emissions by 2050 – but still lack credible policies and plans to achieve those long-term targets. These first-of-their-kind resolutions, filed by the Sierra Club Foundation and other investor members of the Interfaith Center on Corporate Responsibility (ICCR), simply ask the banks to align their practices with their public commitments to climate action. There is a clear scientific consensus that in order to achieve net-zero by 2050 and avert the worst of the climate crisis, the expansion of new fossil fuel development must stop immediately. But although they claim their net-zero approaches are aligned with science-based frameworks and methodologies, these banks have continued to finance fossil fuel expansion to the tune of hundreds of billions of dollars in the years since the Paris Climate Agreement was signed.

Three of the big banks – Citi, JPMorgan Chase, and Morgan Stanley – filed appeals asking the US Securities and Exchange Commission to block the resolutions from being voted on, but each of those requests was denied. 

WHAT TO WATCH: 

The first test will come on Tuesday, April 26, as Bank of America, Citi, and Wells Fargo all hold their virtual shareholder meetings. Goldman Sachs will hold its meeting in person two days later. Results of the votes on the climate resolutions will be available immediately. 

Any resolution that receives at least 5 percent of the vote is eligible to be refiled next year, and anything that receives 10 percent or more is difficult for a company to ignore, even if it doesn’t pass outright. 

The New York State Common Retirement Fund, the third largest pension fund in the country, has already announced that it will be voting in support of the resolutions. Other state and city pension funds and treasurers may follow suit. 

All eyes will be on the world’s largest asset managers — including BlackRock, Vanguard, State Street, and Fidelity — which are by far the largest shareholders of the big banks, and are therefore uniquely positioned to make a huge impact on these important votes. These asset managers themselves have made net-zero commitments and have pledged to use their shareholder power to advance those goals. 

“All the big banks have acknowledged their climate problems and made long-term commitments to address them, but so far none have actually changed their lending policies to be compatible with those commitments,” said Adele Shraiman, campaign representative for the Sierra Club’s Fossil-Free Finance campaign. “The science is clear that achieving net-zero emissions by 2050 and averting the worst impacts of the climate crisis means stopping the expansion of fossil fuels immediately. Banks must adjust their practices accordingly, and it’s up to their shareholders—especially BlackRock, Vanguard, and State Street—to hold them accountable.”

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The Sierra Club is the most enduring and influential grassroots environmental organization in the United States. We amplify the power of our 3.8 million members and supporters to defend everyone’s right to a healthy world.

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