NEW YORK–Wells Fargo has become the last of the big six mega-banks in the U.S. to issue a long-term climate commitment, saying it plans to be “net zero” in carbon emissions by 2050.
Wells Fargo had been under pressure to make such a commitment, with the Rainforest Action Network saying its research showed Wells Fargo was the world’s second worst banker of fossil fuels between 2016 and 2019, and the worst banker of fracking between 2016 and the end of August 2020.
The Rainforest Action Network is calling on the bank to do more.
“To match what the UN’s climate scientists say is necessary to stay under 1.5°C of warming, Wells Fargo’s net zero pledge must include targets for its lending and underwriting for coal, oil and gas that put it on a path to at least halving its financed emissions by 2030,” RAN said. “To achieve this it must immediately stop financing fossil fuel expansion — there is no room in the carbon budget for building new fossil infrastructure like the Line 3 pipeline which is designed to keep pumping carbon for decades to come.”
Citibank Announces Action
Meanwhile, prior to the Wells Fargo announcement, Citigroup also announced a commitment to achieve net-zero greenhouse gas emissions from its financing activities by 2050.
The megabank joins other large U.S. banks, including Morgan Stanley, Bank of America and JPMorgan Chase in setting long-term targets to reduce its financed emissions in line with the Paris Climate Agreement.
The announcement comes after engagement with investors regarding a shareholder resolution filed by As You Sow, Mercy Investment Services, Boston Common Asset Management, Arjuna Capital, Presbyterian Church USA, and the School Sisters of Notre Dame Cooperative Fund.
The resolution, which asks the company to disclose whether and how it will reduce emissions from its financing in line with the global goal of limiting warming to 1.5 degrees Celsius, has been withdrawn in recognition of Citi’s new commitment, according to its backers.
“Investors applaud this commitment from Citi at this critical moment,” said Danielle Fugere, president of As You Sow. “By announcing a net-zero target on day one, Citi’s CEO is demonstrating much needed leadership in addressing the climate crisis. This announcement aligns Citi with other major banks taking action on climate change and sends a clear signal that client companies must either begin transitioning to net-zero business models or face higher costs of capital. We look forward to learning more about how Citi will meet this critical and urgent goal; there is much work to do.”
Alignment With Paris Agreement
According to the organization, all six U.S. banks have now set ambitious financed emission targets and have agreed to measure and disclose progress towards those goals. Bank of America earlier this month announced a commitment to reduce its financed emissions in line with the Paris Agreement’s net-zero goal, resolving a shareholder proposal. JPMorgan also resolved a shareholder proposal in agreeing to disclose its financed emissions for three high-carbon sectors; provide assumptions and methodologies; report on its success in portfolio decarbonization; and announce a timeline for adding additional sectors.