Morgan Stanley shareholders vote on fossil fuel financing proposal at annual meeting

US bank Morgan Stanley held its annual general meeting today, where shareholders voted on an investor proposal from the Sierra Club Foundation asking the bank to adopt a time-bound phase out of financing new fossil fuel exploration and development (4.8% support). Morgan Stanley is one of the 6 biggest banks in the US and one of the biggest fossil fuel financiers in the world, including the top global financier of LNG since 2016, according to the annual Banking on Climate Chaos report.

• See results from similar shareholder proposals at the annual meetings of Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and JPMorgan Chase.

A similar proposal on financing fossil fuel expansion was filed last year at Morgan Stanley and received 8.3% support. Several amendments were made to the fossil fuel financing proposals filed this year at Morgan Stanley and other banks, including asking the banks to adopt a policy to phase out financing for projects and companies engaging in new fossil fuel exploration and development, activities which are incompatible with limiting global warming to 1.5°C, and encouraging the banks to provide financing for energy sector clients to credibly transition to cleaner technologies, which could safeguard against greenwashing and accelerate the clean energy transition.

In response to the news, Jessye Waxman, Senior Campaign Representative for the Sierra Club’s Fossil-Free Finance campaign, issued the following statement:

“Morgan Stanley’s annual meeting marks the end of a disappointing season for investor accountability on Wall Street’s climate promises. Big US banks are some of the largest global providers of the capital that is critical for fossil fuel expansion. While investors did lend more support this year to resolutions calling for disclosure of climate transition plans, it is alarming that more investors did not support provisions calling for stronger action on climate risk mitigation practices. The fact that major investors are not demonstrating greater concern for reducing systematic climate risks points to a failure of fiduciary responsibility and a setback for action to address the growing climate crisis.”

BACKGROUND

According to the annual Banking on Climate Chaos report, Morgan Stanley is the top global financier of LNG, providing $10.4 billion since the Paris Agreement in 2016 and providing $1.8 billion in 2022 alone. Its top clients include Venture Global, the company behind the proposed Plaquemines LNG export facility in Louisiana, which would be one of the largest fracked gas export terminals in the US. A June 2022 report by the Sierra Club analyzes the facility’s potential impact on the environment, climate, and nearby communities.

All of the climate-related resolutions introduced this year at big US banks were publicly supported in advance by several large institutional investors, including Britain’s biggest asset manager Legal & General Investment Management, as well as the New York City and New York State Comptrollers, the Vermont State Treasurer, the Seattle City Employees Retirement System, Vancity Investment Management, and more. The vote total at Morgan Stanley suggests that major asset managers BlackRock, Vanguard, and State Street — three of the largest shareholders of the big banks with outsized impact on the voting results — failed to support the proposal.

Climate advocacy groups and responsible investors have been increasingly disappointed with global investors — including major asset managers like BlackRock, Vanguard, and State Street — for their weakened support of climate-related shareholder proposals. The Sierra Club has specifically critiqued BlackRock for its “abdication of leadership” and Vanguard for withdrawing from the Net Zero Asset Managers (NZAM) initiative.