NYC pension leaders urge fossil fuel lending curbs, late boost for activists
2022.04.25 14:31
FILE PHOTO: Activists from the climate group Extinction Rebellion demonstrate in front of the John Wilson district government building to demand an end to all new fossil fuel infrastructure in Washington, U.S., April 22, 2022. REUTERS/Evelyn Hockstein
By Ross Kerber
(Reuters) – New York City pension leaders said the $262 billion system will mostly favor calls for sharp limits on fossil fuel lending at top banks this week, giving a late boost to activists who have gained little backing from proxy advisers.
The fate of the closely watched shareholder resolutions will show how investors will weigh climate concerns against rising energy prices and Republican criticism of Wall Street’s embrace of environmental concerns.
Staff for New York City Comptroller Brad Lander said the city’s main pension funds would back resolutions on Tuesday at the shareholder meetings of Bank of America (NYSE:BAC), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) & Co effectively calling for no new oil or gas lending.
Assistant Comptroller Michael Garland said in an interview that climate change poses systemic risk to the funds, and that “there’s no credible path to Net Zero by 2050 unless there is no more investment in new fossil fuel supply.”
A Bank of America spokeswoman referred to a securities filing calling the proposal unnecessary because of other steps it has taken like financing for low-carbon energy sources.
A Citi representative said it would not comment beyond arguments in its proxy arguing against the measure for reasons including that the bank is focused on helping clients transition to lower emissions.
Representatives for Wells Fargo, which has made similar arguments, did not respond to requests for comment.
Backing from the fourth-largest U.S. public retirement system will help the measures filed by climate-focused investors including the Sierra Club Foundation, and which earlier won support from New York State’s big pension fund.
But trustees for New York City police and firefighter pension funds with a combined $70 billion will vote “against” the measures, Garland said. Unlike other city funds, police and firefighter pension officials have not divested from fossil fuel stocks that could be hurt by lending limits.
Top proxy advisors have recommended votes against the resolutions at major banks so far in their main reports to investors. For instance, Institutional Shareholder Services noted Citigroup has taken steps like banning the financing of arctic drilling.
