Super AGM Tuesday
On April 26th, investors voted on resolutions urging Bank of America, Citigroup, and Wells Fargo to align their business with the IEA’s 1.5-degree scenario. It was the first time resolutions were introduced asking banks to end financing for new fossil fuel development, going beyond any previous climate-related shareholder proposal. 12.8% percent of shareholders supported the resolution at Citigroup, while 11% supported the proposals at Wells Fargo and Bank of America, respectively. This translates into support from shareholders representing $13 billion worth of assets at Citi, $33 billion at Bank of America and $19 billion at Wells Fargo. More than a third of shareholders supported resolutions about Indigenous rights policies at Citi and over a quarter of shareholders at Wells Fargo.
Ben Cushing, Campaign Manager of the Sierra Club’s Fossil-Free Finance campaign: “Not all shareholder resolutions are created equal. These were first of their kind resolutions going beyond what big banks’ investors have previously been asked to consider. For the first time, banks were asked to adopt common-sense policies to align their funding with climate science and their commitments. We’ve seen a myriad of net-zero commitments from the finance industry. These resolutions are asking banks to ensure they get there, including a call for them to stop financing fossil fuel expansion. That’s a major step forward, and the number of investors who were ready to push the banks from promises to action is significant. These demands from investors will only grow louder.”
While not enough to allow these unprecedented resolutions to pass, the results are significant because they represent a much heavier lift than previous climate resolutions. Supporting disclosure-based proposals or vague, distant climate commitments is much easier than calling on banks to make fundamental changes to their business models. The double-digit support these resolutions received the first time they were filed is likely a sign that similar efforts will receive even more widespread backing from shareholders. Institutional investors such as the New York State pension fund – the third largest in the US – New York City’s leading pension fund, Rhode Island’s pension system, and the Seattle City Employees Retirement system all declared their support for the “no fossil fuel expansion” resolutions ahead of the shareholder meetings, urging other investors to do the same.
Now it is time for financial behemoths with public climate commitments like BlackRock and Vanguard to follow their lead and take the next logical steps in fulfilling their climate commitments. Climate scientists and energy specialists such as the IPCC and IEA have made it abundantly clear that there is neither space nor need for fossil fuel expansion in a 1.5-degree scenario. Any financial institution committed to net-zero by 2050 needs to take a clear stand on fossil fuel expansion. Providing funding to companies planning to expand their coal, oil, and gas production can not be aligned with a 1.5-degree pathway.