New York pension seek stricter climate emissions rules from bank portfolios
Climate change activists protest at the Wall Street Bull in Lower Manhattan during Extinction Rebellion protests in New York City
Tue, January 24, 2023
By Ross Kerber
(Reuters) - Shareholder resolutions filed by New York City's top pension official will ask top Wall Street banks including JPMorgan Chase & Co and Bank of America to set stricter 2030 greenhouse gas emissions reduction targets for portfolio companies.
If the advisory proposals come to a vote at bank shareholder meetings this spring they would test investors' climate commitments after setbacks in 2022, when calls for more dramatic cuts in fossil fuel financing put forward by other climate activists won slim support.
New York City Comptroller Brad Lander, who filed the new resolutions this year, said he aims to put up measures that have a strong chance of winning majority support. Many investors "want to see companies' net-zero commitments be made real," Lander said in an interview.
New York City's funds have been among the most aggressive in pushing energy companies away from fossil fuels, but few other big investors have embraced calls to divest from the sector amid rising energy prices. Meanwhile, Republican officials in states including Texas and Florida have sought to deny business to certain financial companies over their treatment of fossil fuel producers.
The new resolutions ask banks including Bank of America, Goldman Sachs Group and JPMorgan to commit to reducing emissions in their energy lending and underwriting. Lander cited plans outlined last year by Citigroup for emissions across its energy loan portfolio to drop 29% by 2030 from 2020.
Currently the other three banks have goals to reduce the "emissions intensity" of their financing, a measure of emissions relative to output that climate activists say does not go far enough.
Representatives for JPMorgan, Bank of America and Goldman Sachs declined to comment on the resolutions.
The banks' role in cutting global emissions is part of a debate about their obligations as members of the Net Zero Banking Alliance, a United Nations-backed effort to encourage decarbonization and to reach net-zero emissions from banks' lending and investment portfolios by 2050 to limit the rise of global temperatures.
(Reporting by Ross Kerber; Additional reporting by Saeed Azhar; Editing by David Gregorio)
Climate change activists protest at the Wall Street Bull in Lower Manhattan during Extinction Rebellion protests in New York City
Tue, January 24, 2023
By Ross Kerber
(Reuters) - Shareholder resolutions filed by New York City's top pension official will ask top Wall Street banks including JPMorgan Chase & Co and Bank of America to set stricter 2030 greenhouse gas emissions reduction targets for portfolio companies.
If the advisory proposals come to a vote at bank shareholder meetings this spring they would test investors' climate commitments after setbacks in 2022, when calls for more dramatic cuts in fossil fuel financing put forward by other climate activists won slim support.
New York City Comptroller Brad Lander, who filed the new resolutions this year, said he aims to put up measures that have a strong chance of winning majority support. Many investors "want to see companies' net-zero commitments be made real," Lander said in an interview.
New York City's funds have been among the most aggressive in pushing energy companies away from fossil fuels, but few other big investors have embraced calls to divest from the sector amid rising energy prices. Meanwhile, Republican officials in states including Texas and Florida have sought to deny business to certain financial companies over their treatment of fossil fuel producers.
The new resolutions ask banks including Bank of America, Goldman Sachs Group and JPMorgan to commit to reducing emissions in their energy lending and underwriting. Lander cited plans outlined last year by Citigroup for emissions across its energy loan portfolio to drop 29% by 2030 from 2020.
Currently the other three banks have goals to reduce the "emissions intensity" of their financing, a measure of emissions relative to output that climate activists say does not go far enough.
Representatives for JPMorgan, Bank of America and Goldman Sachs declined to comment on the resolutions.
The banks' role in cutting global emissions is part of a debate about their obligations as members of the Net Zero Banking Alliance, a United Nations-backed effort to encourage decarbonization and to reach net-zero emissions from banks' lending and investment portfolios by 2050 to limit the rise of global temperatures.
(Reporting by Ross Kerber; Additional reporting by Saeed Azhar; Editing by David Gregorio)
"Shareholders applauded these banks when they set net-zero goals – but it can't be all talk."
Jeff Lagerquist
Tue, January 24, 2023
Among the big Canadian banks, RBC has faced the most criticism for its ties to the fossil fuel sector.
New York City's comptroller and three NYC pension plans are calling on Royal Bank of Canada (RBC) (RY.TO)(RY) to spell out absolute greenhouse gas emissions targets for 2030.
In a statement on Tuesday, Canada's largest commercial bank was cited with Wall Street peers Bank of America (BAC), Goldman Sachs Group (GS), and JPMorgan Chase (JPM) for "not taking a basic step of setting interim reduction targets that account for total portfolio emissions."
New York City Comptroller Brad Lander, the New York City Employees' Retirement System, Teachers' Retirement System, and Board of Education Retirement System say they have filed shareholder proposals recommending "an absolute reduction target aligned with a science-based net zero emissions pathway" for each lender.
"Shareholders applauded these banks when they set net-zero goals – but it can't be all talk. We expect them to take the steps needed now to reduce emissions on the timeline to which they have committed," Lander stated on Tuesday. "Absent a concrete plan to reduce absolute emissions in the real world in the near term, any net-zero plan rings hollow."
According to Tuesday's release, as of November 2022, the three New York City Retirement systems combined had a total holding of:
7.74 million shares of Bank of America stock valued at US$239.04 million
437 thousand shares of Goldman Sachs stock valued at US$168.82 million
2.99 million shares of JPMorgan Chase stock valued at US$412.91 million, and
293 thousand shares of Royal Bank of Canada stock valued at US$28.92 million
All of the named institutions are members of the UN's Net-Zero Banking Alliance, which includes a commitment to "annually publish absolute emissions and emissions intensity in line with best practice and within a year of setting targets."
Among the big Canadian banks, RBC has faced the most criticism for its ties to the fossil fuel sector.
Last month, when HSBC Holdings announced plans to halt new lending or capital markets financing for new oil and gas fields, the Canadian unit of the bank set to be sold to RBC was exempted. In October, the Competition Bureau of Canada launched an investigation into "false or misleading environmental representations" by the bank.
"We are committed to achieving net-zero in our lending by 2050, and have established interim emissions reduction targets that will help us drive action and measure progress," Andrew Block, RBC's senior director for climate communication, wrote in an email to Yahoo Finance Canada on Tuesday.
"These targets are informed by science and reflect a measured and deliberate approach to climate action. We expect that they will evolve over time as methodologies, data and decarbonization pathways advance."
"This is big deal, big money coming to the table to challenge RBC and other major banks on their emissions and ultimately their fossil fuel company financing," Richard Brooks, climate finance director at North American environmental organization Stand.earth, said on Tuesday.
"New York City recognizes that climate change doesn't respect borders, and Canada's largest bank needs to get on side with the science if we have a hope of reducing emissions globally."
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