NYC Comptroller: Major Banks Neglect Their Own Net Zero Goals

Three of the city’s pension funds filed shareholder proposals seeking greater fossil-fuel transparency at six of the largest banks in North America.

New York City Comptroller Brad Lander and three of the city’s pension funds have filed shareholder proposals asking banks to fully report their ratios of clean energy to fossil fuel finance and “live up to their own rhetoric on achieving net zero implementation plans.”

The proposals were filed by Lander and trustees of the New York City Employees’ Retirement System, the Teachers’ Retirement System and the Board of Education Retirement System at JPMorgan Chase and Morgan Stanley, while NYCERS and TRS also filed proposals at Bank of America, Citigroup, Goldman Sachs, and Royal Bank of Canada.

The proposals are asking the banks to disclose energy-supply financing ratios and to report regularly and transparently on whether they are hitting their targets. Lander and the pension funds said energy-supply finance ratios are “an essential metric” to measure a bank’s equity and debt financing of companies and projects.

The resolutions also call for each bank to:

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Set timebound energy-supply financing ratio targets aligned with their net zero commitments.
Consult Bloomberg NEF reports when setting ratio targets and defining “low-carbon” and “fossil-fuel” financing.
Set standardized industrywide methodologies.
Include lending in its ratio – if it is “methodologically sound.”

“Despite all their talk, the big banks have made little progress in the energy finance transition over the past couple of years,” Lander said in a release. “As long-term investors exposed to climate risk, we can’t just take their word for it. Reporting transparently on their ratios of clean energy to fossil fuel finance is key to seeing whether or not they are living up to their net-zero commitments. Right now, they aren’t.”

As of December, the three New York City retirement systems owned 2.81 million shares combined in JPMorgan Chase worth $477.51 million; 7.17 million shares in Bank of America, $241.31 million; 2.32 million shares in Citigroup, $119.46 million; 385,630 shares in Goldman Sachs, $148.76 million; 1.36 million shares in Morgan Stanley, $126.81 million; and 216,120 shares in Royal Bank of Canada, $21.96 million.

“North American banks appear to believe that they can just scale up financing of clean energy, without phasing out fossil fuel finance,” Lander said. “But press releases about great new projects won’t protect our portfolios or our planet if overall emissions keep rising.”

RBC said in a statement to CIO that it is “committed to achieving net-zero in our lending portfolio by 2050,” and that it is working with its clients “to support their plans to bring their emissions down, not just to get them off our books.” The bank added that “we believe in open, transparent dialogue and appreciate the opportunity to engage with shareholders on a shared desire to help ensure a successful transition to net-zero.”

JPMorgan Chase declined to comment, while Morgan Stanley, Bank of America, Citigroup, Goldman Sachs and did not immediately respond to a request for comment.