NYC Pensions Reach Climate Disclosure Deal With JPMorgan Chase, Citigroup, RBC

New York City Comptroller Brad Lander and three NYC pension funds have reached agreements with JPMorgan Chase, Citigroup, and the Royal Bank of Canada requiring the banks to regularly disclose their ratio of clean energy supply financing to fossil fuel extraction financing and their underlying methodology.

“Despite their commitments to decarbonize, U.S. and Canadian banks have financed over $1 trillion of fossil fuel extraction since the Paris Accords,” Landers said in a statement. “The transition from financing fossil fuels to low-carbon energy is going far too slowly – and thus far, it hasn’t even been possible for shareholders to track.”

Lander said he expects energy supply ratio disclosure will become a “new standard” for the banking sector. The ratio is defined in the agreements as the total financing through equity and debt underwriting, and project finance, in low-carbon energy supply as a proportion of that in fossil-fuel energy supply. The calculation aims to highlight the real economic impacts of the banks’ energy supply financing and is intended to provide information for investors in an area where disclosure is currently opaque.

The comptroller said the disclosures will allow investors to more accurately determine a bank’s transition risks and opportunities, and gauge how well it is meeting its net zero and sustainable finance commitments, as well as the pace and scale of its transition to a low-carbon environment.

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Lander said the settlements followed shareholder engagements between the banks and the trustees of the New York City Employees’ Retirement System, the Teachers’ Retirement System, and the Board of Education Retirement System. The comptroller’s office touted the agreements as a “critical step” to better gauge how banks affect the climate transition, and whether they are on track to meet their emissions reduction commitments.

Lander and the pension funds currently have shareholder proposals filed with Bank of America, Goldman Sachs and Morgan Stanley and said they will continue engagement on the issue.

“We appreciate JPMorgan, Citi, and RBC agreeing to provide greater transparency so that long-term investors can more effectively measure how well they are or aren’t living up to their commitments,” Lander said. “We call on Bank of America, Goldman Sachs, and Morgan Stanley to follow suit at a time when our planet and investment portfolios are at risk.”