Asset Managers: Support crucial shareholder resolutions on climate!

BlackRock, Vanguard, Fidelity, and State Street

In the fight for a livable planet, everyone knows elections are important. Every spring investors have the chance to vote in some of the most critical climate elections of the year. In these elections at annual corporate meetings, the biggest shareholders have the biggest, and therefore an outsized influence in these elections.

This shareholder season, there are five key climate votes on the ballot at Wall Street banks. These votes shape how banks will act – what fossil fuel projects get built, how climate solutions are funded, and what kind of responsibility banks and their clients will take toward Indigenous and frontline communities.

Banks have bankrolled the climate crisis for years, pouring billions of dollars into fossil fuel companies, facilitating the construction of new coal, oil, and gas projects, and ignoring the risks that this financing poses to communities, investors, and the entire economy.

As some of the largest shareholders in these banks, asset managers like BlackRock, Vanguard, Fidelity, and State Street, are uniquely positioned to make a huge impact on these important votes.

This year, they must show their support for these key resolutions and vote out directors at companies with failing climate commitments.

If they vote no again this year, there’s no excuse. They’ll be blatantly disregarding climate science, the needs of frontline communities, and the best interests of the public and their clients.

Tell the biggest asset managers: Stop banks’ reckless funding for new fossil fuel expansion!

To: BlackRock, Vanguard, Fidelity, and State Street
From: [Your Name]

We call on you to support all climate and Indigenous rights-related votes at shareholder meetings this spring, generally and particularly at US and Canadian banks and insurance companies. Specifically, there are five votes before major banks and insurance companies that we urge you to support:

Time-Bound Phase-Out of New Fossil Fuel Exploration and Development:

These resolutions urge companies to adopt a policy for a time-bound phase-out of lending and underwriting for projects and companies engaged in fossil fuel expansion. The resolutions were filed at the banks JP Morgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley, and Royal Bank of Canada (RBC); and the insurance companies Chubb, The Hartford, and Travelers.

Indigenous Rights Report:

This resolution, filed at Citigroup, calls for a report on the effectiveness of bank practices, policies, and performance indicators in respecting internationally-recognized human rights standards for Indigenous Peoples’ rights in its existing and proposed general corporate and project financing.

Absolute Greenhouse Gas Reduction Targets:

These resolutions urge banks to set absolute, not intensity-based, emissions metrics when setting their emissions reductions targets for financing the energy sector. This proposal is in line with the United Nations High-Level Expert Group guidance for the best practices for companies to set Paris-aligned climate goals, and which recommends that companies should set emissions reductions targets using absolute emissions metrics rather than emissions intensity. These resolutions were filed by New York City and New York State at Bank of America, Goldman Sachs, JPMorgan Chase, and Royal Bank of Canada (RBC).

Report on Climate Transition Planning:

These resolutions would require banks to publish a comprehensive plan detailing how they will meet their 2030 climate targets, including, for example, disclosure of clients’ estimated annual reductions and how the bank plans to achieve remaining reductions. They were filed at JP Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley, TD Bank, and Bank of Montreal.

Vote Against Directors Responsible for Climate Risk Oversight at US Banks

Votes against board directors are warranted in instances where the bank has failed to transform business practices in line with 1.5°C pathways, specifically with regard to misalignment of lending and underwriting practices with 1.5°C scenarios. At such companies, it is evident that the Board has been unable to uphold their fiduciary duty to manage risk comprehensively and to steer the company along necessary decarbonization pathways. At such companies, investors are encouraged to vote against directors responsible for climate oversight. Votes against directors on grounds of inadequate climate risk management are warranted at: Bank of America, Citibank, JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Wells Fargo.

The global financial giant, Swiss Re, has estimated that the world stands to lose close to ten percent of total economic value by mid-century if climate change stays on the currently anticipated trajectory. If the world warms by 3.2°C, the economic losses will hit $23 trillion by 2050, or eighteen percent of global economic value. As some of the world’s largest asset managers, you have a fiduciary responsibility to manage your clients’ savings in a manner that mitigates this climate-related financial risk. A key way to do this is using your proxy voting powers to support shareholder resolutions that move banks and insurance companies toward Paris-alignment and respecting Indigenous rights and sovereignty ― two things that banks and insurance companies are currently failing on.

I hope you make the right choice.