Dive Brief:
- More than a quarter of shareholders at Bank of America and Goldman Sachs supported a resolution for the banks to disclose their ratios of clean energy to fossil fuel financing at their respective annual board meetings Wednesday.
- The resolution, proposed by the New York City Comptroller’s Office, was supported by 26% of shareholders at Bank of America, according to environmental group Sierra Club, and by 29% of shareholders at Goldman Sachs, the latter putting the votes right outside “near-miss” territory. Near miss resolutions are those that get more than 30% of support, but fail to hit the 40% threshold needed to be considered a “key resolution.”
- While the votes at both boards failed, the level of investor support is notable. In contrast, the voting outcome of a resolution that asked Goldman Sachs’ board to oppose climate action generated a near-unanimous panning — 1% support.
Dive Insight:
NYC Comptroller Brad Lander and the city’s retirement funds previously reached agreements on clean energy ratio disclosure proposals with JPMorgan Chase, Citigroup and Royal Bank of Canada in the past two months. Both the boards of Bank of America and Goldman Sachs recommended its shareholders vote against the proposal.
Bank of America’s board had previously said it recommended opposing the proposal because it believes third-parties are already publicly disclosing similar information, according to its investor materials. Additionally, the bank said it is “transparent about actions to set targets for financed emissions in support of our commitment to achieving net zero GHG emissions before 2050.”
Goldman Sachs’ board “unanimously” recommended rejecting the proposal because it said it will publish a green asset ratio later this year to comply with European Banking Authority requirements, according to its investor materials.
The clean energy ratio disclosure proposals were among several ESG-related proposals at each bank. Goldman Sachs had a proposal by shareholder activist John Chevedden receive 39% support — a near-miss — for the company to issue an annual report on its government lobbying processes. Socially responsible investor Trillium Asset Management also received 27% support on a resolution proposed at Bank of America for the bank to align its lobbying activities with its climate goals, according to Sierra Club’s preliminary results.
Ben Cushing, director of Sierra Club’s Fossil-Free Finance campaign, said in a press release the results of the climate-related proposals “sent a strong signal to big banks” that investors want increased transparency on how these banks are implementing their climate goals and aligning their financing efforts.
“Shareholder pressure on banks’ climate plans is getting stronger, and investors — including some of the country’s largest pension funds — are showing they will continue to call for robust disclosures and climate-alignment from banks,” Cushing said in a release. “We expect this pressure to continue through the rest of this year’s [annual general meetings] and far beyond.”
The New York State Comptroller recently urged Capital One shareholders to approve its proposal for the bank to set scope 3 emissions reductions targets. That proposal will go to a vote at Capital One’s annual meeting May 2. Additionally, the NYC Comptroller and city pension funds will face a vote on a proposal for Morgan Stanley to disclose its clean energy financing ratio at its meeting May 23.
