The climate movement is not alone in pushing banks to quit their fossil fuel addiction. A group of investors, led by influential campaign group ShareAction, has written to major banks around the world, urging them to move much faster in ending their support of fossil fuel companies. With international climate and environment meetings on the horizon, this latest move puts banks under even more pressure to act quickly.
No less than 115 investment companies and asset managers have signed the letter – together they represent $4.2 trillion of assets. They’ve targeted banks across Europe, North America and Asia, including HSBC, Barclays, Credit Suisse, JP Morgan, Royal Bank of Canada, and MUFG. Investors have threatened further action at future shareholder meetings if they aren’t satisfied with the banks’ response.
Many of these banks have signed up to voluntary pledges, such as the Net-Zero Banking Alliance (NZBA), which offer vague promises of getting serious about the climate crisis at some point in the future. The investors have said this isn’t good enough, and that the banks must start putting concrete plans into action right now.
Banks signed up to the NZBA are expected to reveal their initial climate pledges by the end of 2022. But the investor group wants banks to get details out before their annual meetings which will happen around spring next year.
The targets laid out in the investors’ letter go way beyond anything the banks have currently proposed. They want to see all financing for companies building new coal mines and power plants to stop this year, before the UN climate conference – COP26 – in November.
Then they want all other coal financing to end by 2030 in richer OECD countries and by 2040 in the rest of the world. And the investors want to see banks adopt the roadmap recently published by the International Energy Agency, which plots out how the global energy sector can reach net-zero by 2050.
It’s not just the climate crisis that these investors are worried about. Bank financing is also causing havoc elsewhere in the natural world, leading to the destruction of forests, grasslands and other habitats, pushing huge numbers of plant and animal species to extinction. A major international biodiversity meeting – the Convention on Biological Diversity’s COP15 – is also coming up in October and investors want to see movement by then.
So the letter asks the banks to set out clear plans for protecting biodiversity as well. These include setting out better safeguards for biodiversity and human rights, and taking part in setting up a new taskforce to help banks get a clearer picture of the environmental risks associated with their financial decisions.
Earlier this year at their annual shareholder meetings, bank executives faced a barrage of questions about their climate policies, and concerned investors used their votes to push for more immediate action. Even oil companies like ExxonMobil and Chevron felt the heat as shareholders revolted over their resistance to change.
The investors behind this latest intervention have made clear that at next year’s meetings they will take into account the steps each bank has – or hasn’t – taken. After it all, banks are risking their investments by ploughing money into companies which are literally burning up the planet. And we’ll never douse the flames while banks are fuelling them.