Bank shareholder proposals to curb new fossil fuel lending get slim support

NEW YORK/BOSTON (Reuters) – Shareholder proposals asking banks to take stronger action on climate change by ending new fossil fuel financing activities failed to get much support at investor meetings on Tuesday.

FILE PHOTO: Water vapor billows from smokestacks at the incineration plant of Ivry-sur-Seine, near Paris, France, December 18, 2019. REUTERS/Charles Platiau/File Photo

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

Wells Fargo & Co investors gave less than 11% support to a similar proposal asking the bank 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 face similar shareholder proposals at their annual meetings later this year.

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

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

Investors peppered bank directors and executives with questions on a range of social and environmental policies. The questions reflected strongly held views by environmental and humanitarian activists, who called on banks to expand pro-environmental commitments and examine racial equity among employees, and Republican-leaning viewpoints, critical of 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 who go out of state for abortions to avoid newly enacted restrictions in Texas and other places.

“We know this is a subject people feel passionate about. I want to be clear that this benefit is not intended to be a statement about a very sensitive issue,” Fraser said, reiterating that the bank has long reimbursed employees for travel costs incurred for healthcare treatments.

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 middling support with around 34% of shares voted in support.

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

Shareholders at each of the banks voted overwhelmingly to elect all directors and to approve executives’ 2021 compensation packages.

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