Bank shareholder proposals to curb new fossil fuel lending receive weak support

By Elizabeth Dilts Marshall and Ross Kerber

NEW YORK/BOSTON (Reuters) – Shareholder proposals asking banks to take stronger action on climate change by ending new fossil fuel financing business did not receive much support at investor meetings tuesday.

Investors in Citigroup and Bank of America had little support for proposals essentially asking banks to stop funding new fossil fuel supplies, with less than 13% of Citi shares and less than 11% of Bank of America shares cast at support for proposals. , according to the preliminary accounts given by the leaders of the banks.

Investors in Wells Fargo & Co backed a similar proposal less than 11% asking the bank to adopt a similar policy by the end of 2022.

The shareholder resolutions had been closely watched as a test of how investors will weigh climate concerns against rising energy prices.

Several other banks and insurance companies will soon face similar shareholder proposals at their annual meetings.

Heidi Welsh, executive director of the Sustainable Investments Institute, which tracks shareholder resolutions, said the results likely reflected the current instability in energy markets and activists’ challenge to persuade big mutual funds to support their causes.

“These (results) are quite low,” she said.

Representatives of major fund managers BlackRock Inc and Vanguard Group declined to say how they voted on the measures, which the banks opposed. Ben Cushing, a representative from the Sierra Club, which sponsored some of the proposals, said big business may have been spooked by rising oil prices.

“The current narrative in global energy markets is probably getting into the heads of investment managers,” he said. Cushing said the results were decent for early resolutions asking for aggressive changes.

In the meetings, all held via webcast, investors bombarded bank directors and executives with questions about a range of social and environmental policies.

The questions reflected strong views from environmental and humanitarian activists, who called on banks to expand pro-environment commitments and examine racial equity among employees, and Republican-leaning views critical of the Wall Street’s embrace of environmental and social concerns.

Citigroup chief executive Jane Fraser was asked to address a new policy that covers travel expenses for employees going out of state for abortions to avoid newly enacted restrictions in Texas and elsewhere.

“We know this is a topic that people are passionate about. I want to clarify that this benefit is not intended to be a statement on a very sensitive issue,” Fraser said, reiterating that the bank has long reimbursed employees. travel expenses incurred for health treatment.

A Citi shareholder proposal calling for a report on the effectiveness of the bank’s policies on humanitarian and environmental issues, specifically related to indigenous communities, received medium support with about 34% of shares voting in favor.

None of the shareholder proposals from Citi, Bank of America or Wells received a majority of votes.

Shareholders of each of the banks voted overwhelmingly to elect all directors and approve executive compensation for 2021.

(Reporting by Elizabeth Dilts Marshall in New York, Sohini Podder, Noor Zainab Hussain, Niket Nishant in Bangaluru, Michelle Price in Washington DC and Ross Kerber in Boston; Editing by Nick Zieminski and David Gregorio)

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