Citigroup, Bank of America, and Wells Fargo shareholders are voting on Tuesday on non-binding resolutions proposed by environmental groups and ESG investors to wind down or phase out financing for fossil fuels.
At last year’s shareholders’ meetings of some of the biggest American banks, similar resolutions won no more than 13% of shareholder support, Reuters notes.
Early this year, As You Sow, Harrington Investments, The Sierra Club Foundation (SCF), and Trillium Asset Management filed two shareholder proposals at six of the top U.S. banks “to move them toward more climate-friendly policies that better align with their public commitments to net zero by 2050.”
Resolutions were filed for shareholder votes at Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo.
Fossil fuel financing from the world’s 60 largest banks hit $673 billion in 2022. These banks have funded $5.5 trillion in fossil fuels projects in the seven years since the adoption of the Paris Agreement, according to the annual Banking on Climate Chaos report by environmental groups published earlier this month.
To compare, the previous edition of the report from last year showed that the 60 largest banks in the world poured as much as $742 billion in fossil fuel financing in 2021.
For the first time since 2019, JP Morgan dropped from the top spot of the biggest backer of fossil fuels. JP Morgan is no longer the world’s biggest financier of fossil fuels. Last year Royal Bank of Canada (RBC) became the top bank funding oil and gas, the report showed.
Overall, U.S. banks dominated fossil fuel financing, accounting for 28% of all fossil fuel financing in 2022. JPMorgan remains the world’s biggest funder of fossil fuels since the Paris Agreement, while Citi, Wells Fargo, and Bank of America are still among the top 5 fossil financiers since 2016, the report found.
By Tsvetana Paraskova for Oilprice.com
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And since environmental groups are proposing non-binding resolutions to cut fossil fuel funding by top US banks, it makes the whole initiative the more farcical since banks will simply ignore them.
Oil and gas will continue to drive the global economy throughout the 21st century and probably far beyond. If this is the case, then he global oil and gas industry has a responsibility to satisfy global demand for energy but without investments and bank funds it will fail to meet that goal.
If banks want to help the global economy grow, then the onus is on them to provide funds to the oil industry.
Still, the oil industry can help reduce emissions by increasing investments in carbon capture, utilization and storage (CCUS). This is a very rational way of combatting climate change and also extending the life of oil and gas fields because captured carbon is used for enhanced oil recovery (EOR).
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert