To get big banks out of fossil fuels, climate change activists are making a bold move and taking aim directly at shareholders.
Citigroup, Wells Fargo, Bank of America, and Goldman Sachs shareholders voted in late April on resolutions against further financing for fossil fuel projects. Though just about 10% voted for the measures, pressuring bank insiders is a strategy with potential, according to advocates at groups sponsoring such initiatives.
“I’m optimistic that we can build the vote over time,” Kate Monahan, Director of Shareholder Advocacy at Trillium Asset Management, told Vox. Trillium is a fund that sponsored the resolution at Bank of America. “This is a totally new type of proposal. So 11 percent, I think, is a really good base on which to build for next year.”
In 2021, the four banks spent $137 billion on fossil fuel projects, according to a report from Banking on Climate Chaos, a coalition of environmental advocacy groups.
Other resolution sponsors include the Sierra Club Foundation and asset management firm Harrington Investments.
The approach is similar to that of the divestment movement, in which activists pressured financial institutions, universities, and state pension funds to sell off their interests in fossil fuel companies. It took about a decade to make inroads, with Harvard University, Norway’s sovereign wealth fund, and New York’s pension fund acquiescing. Today, the divestment movement represents about $40 trillion in assets, and numerous firms and funds have committed to aligning with climate targets.
Though the four banks – and JPMorgan and Morgan Stanley – joined a coalition in Glasgow last fall pledging to line up financing with net-zero greenhouse gas emissions by 2050, they continue to fund fossil fuel projects. JPMorgan spent $61 billion in 2021 alone.
“Now we need to see the policies that will actually make that happen,” Loren Blackford, the Investor Committee Chair of the Sierra Club Foundation’s Board of Directors, told Vox.
The Foundation has asked Goldman Sachs to commit to “proactive measures to ensure that the firm’s lending and underwriting activities do not contribute to new fossil fuel development,” claiming the bank is risking its reputation and also jeopardizing its long-term health by investing in a dying industry.