Investors call on banks to ramp up climate strategies or face voting action

Investor groups representing $4.2trn want to see banks phasing out financing coal by 2030 and commitments to TNFD


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Banks have come under fire from asset managers representing $4.2trn, including Aviva Investors, Fidelity International, EOS at Federated Hermes and M&G Investments, who say bank assets are exposed to climate- and nature-related risks.

The 115 investment groups have written to 63 banks including JPMorgan Chase, Deutsche Bank and Standard Chartered, calling on them to strengthen their climate and biodiversity strategies and go beyond voluntary initiatives by phasing out from financing coal by 2030 in OECD countrie,s and by 2040 in non-OECD countries at the latest.

The letter, led by ShareAction, also asks the banks to publish short-term (five to 10 years) climate-related targets covering all relevant financial services ahead of banks’ 2022 AGMs and to align their climate plans with the IEA’s Net-Zero scenario – or another 1.5C scenario with minimal reliance on Negative Emission Technologies – which called for an end to fossil fuel exploration and development. Banks are also asked to review their sectoral policies, company targets, client expectations and financial statements based on the 1.5C scenario they have selected.

See also: – Barclay announces ambition be a ‘net zero bank’

Finally, the investors ask the banking institutions to publish a biodiversity strategy ahead of the COP15 conference in October. This should include:

  • Commitments to identify and disclose impacts and dependencies on biodiversity and to set science-based nature targets by 2024 at the latest.
  • Strengthened sectoral expectations on the management of biodiversity-related risks and impacts for clients in high-impact sectors, and strengthened biodiversity and human rights safeguards in sectoral policies for high impact industries
  • A commitment to engage in the development of the Taskforce on Nature-Related Financial Disclosures (TNFD).

ShareAction’s senior campaign manager Jeanne Martin said: “Leading investors have today called on global banks, including those that have already signed up to the Net-Zero Banking Alliance, to up the ante of their climate and biodiversity strategies ahead of COP26.

“The message from investors is clear: distant net zero targets and warm words about the importance of biodiversity are not enough. Investors want concrete action now, and those banks which fail to respond can expect serious challenges at their next AGMs.”

The asset managers have requested a response from the banks by 15 August including an overview of the steps that each bank is planning to take to address the highlighted issues. The letter concludes with the warning: “Progress against these issues may be taken into consideration within investors’ 2022 AGM voting action and engagement activities, such as voting on special and ordinary resolutions”.

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