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Big Bank Shareholders Reject Climate Proposals

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Shareholders at three of the top US investment banks on Tuesday overwhelmingly voted against resolutions that would have required the firms to stop investing in new fossil fuel projects by the end of the year.

Nearly 90% of the shareholders at Bank of America, Wells Fargo and Citigroup opposed the proposals.

Ahead of Tuesday's votes, Citi, Bank of America and Wells Fargo had urged shareholders to vote against the resolutions, which called for a halt on fossil fuel financing by year's end to meet Paris-aligned climate targets.

In proxy statements released last month, the banks had argued the proposals were more general than the firms’ established plans to reduce emissions, and touted their decisions to not finance Arctic oil projects as examples of their commitment to their respective carbon reduction strategies.

“Our board believes that the policy change requested by the proposal is unnecessary and would restrict our company’s ability to implement our climate strategy, which we believe provides the most effective path for our company to address climate change,” Bank of America said in its proxy statement.

Citi, meanwhile, said it had already “substantially” achieved the objectives of the proposal with its net-zero plan as well as the establishment of medium-term emissions reduction targets for its energy and power segment.

More to Come

The votes followed the recent release of data showing that four US banks accounted for a quarter of all fossil fuel financing in 2016-21: JPMorgan Chase ($382 billion), Citi ($285 billion), Wells Fargo ($272 billion) and Bank of America ($232 billion).

All four of those banks are also members of the UN's Net-Zero Banking Alliance, which is targeting achieving net-zero carbon emissions from members' lending and investment portfolios by 2050.

Other big banks are expected to field similar climate resolutions at this year’s annual general meetings, with Goldman Sachs shareholders set to vote this Thursday and JPMorgan, Standard Chartered and Credit Suisse holding shareholder meetings in the coming weeks.

Undeterred

Despite the relatively lopsided results on Tuesday, the activist investors that pushed the resolutions remained determined to continue advocating for an end to fossil fuel financing.

"New proposals often take time to gain traction, and an 11% vote gives us a strong foundation to build on for next year," said Kate Monahan, director of shareholder advocacy at Trillium Asset Management, which put forth the proposal at Bank of America. "We were heartened by the support the proposal received from large investors like the New York State pension fund, and encourage fellow investors to consider the grave risks posed by continuing to fund fossil fuel expansion."

In its statement on Tuesday, environmental advocacy group Sierra Club, which put forth the resolution at Wells Fargo, blamed major asset managers such as BlackRock, Vanguard and Fidelity for sinking the proposals in Tuesday's vote.

However, the organization noted that resolutions receiving 10% or more of a shareholder vote are difficult for a company to ignore, and that the results “should send a clear signal that the effort to push Wall Street to deal with its climate problem isn’t going anywhere.”

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