BofA, Citi, other big banks should move faster to cut fossil-fuel financing, investors say
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A group of investors on Tuesday have asked U.S. megabanks JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) to reduce the financing of new fossil fuel exploration and development at a faster pace to achieve certain climate targets.
In an effort to move the Wall Street banks to more climate-friendly policies that better meet their public commitments to achieve net zero emissions by 2050, members of Interfaith Center on Corporate Responsibility filed two shareholder proposals at the banks.
"Although the company alleges it is taking steps to mitigate its impact on climate change, records indicate that Citi's (C) carbon financing has no intention of slowing down," said John Harrington of Harrington Investments, which is leading the filing at Citigroup.
In addition to the risks that the funding of oil and gas exploration and development pose to the planet, "these incongruities also pose material financial risks to the banks and their shareholders that warrant stronger scrutiny and action," the ICCR said in the statement.
In the second proposal, investors requested the banks to disclose how they plan to align their financing activities with goals to reduce greenhouse gas emissions by 2030.
"This year's proposal encourages banks to finance companies that are certified by a credible third party to be on a net zero pathway while maintaining that financing for new fossil fuels is incompatible with the banks' climate commitments," said Paul Rissman of the Sierra Club Foundation, which filed a portion of the resolutions.
In recent months, Wall Street giants, namely asset manager BlackRock (BLK), have come under fire from Republicans over unfriendly Environmental, Social, and Governance ("ESG") policies. BLK, in particular, had acted in favor of the low-carbon shift in October 2022, when it formed a new unit to make investments in certain eco-friendly opportunities.
Earlier this month, (Jan. 18) the Federal Reserve provided details on a climate change scenario analysis for large U.S. banks.
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