ShareAction highlights gap between bank’s rhetoric and action on climate change

Seven investors representing $2.48tn have written to the Credit Suisse board ahead of its AGM today, calling on the bank to set a firm deadline to phase out financing for the coal industry. The investors include BMO Global Asset Management, Amundi, Europe’s largest asset manager, and Ethos Foundation, whose members own 3-5% of Credit Suisse’s stock.

Credit Suisse committed in July 2020 not to finance or provide underwriting services to companies with a coal share of revenue greater than 25%, unless that company has a “credible transition strategy to diversify away from thermal coal.”  But it does not say what it considers to be a credible transition strategy and has not set a deadline to fully phase out coal financing.

The Rainforest Action Network found that Credit Suisse was Europe’s largest financier of coal mining and Europe’s third largest financier of coal power over the period 2016-2020.

RAN also noted that, in late 2020, the bank underwrote bond issuances for Adani Ports and Special Economic Zone, whose subsidiary will reportedly transport coal from the controversial Carmichael coal mine in Australia. RAN said that “banks urgently need to cut ties with Adani Ports and Special Economic Zone if they want to be wholly sure that they are not supporting the disastrous Carmichael project.”

Credit Suisse committed in December 2020 to align its financing activities with the 1.5°C goal of the Paris agreement and to develop science-based targets within the next 2 years. This presented a significant narrative shift from Credit Suisse, which ranked near the bottom (18th out of 20) in ShareAction’s latest survey of banks’ responses to climate change.

However, the bank continues to have a sub-par coal and energy policy. Given these gaps between Credit Suisse’s climate rhetoric and its activities, ShareAction and seven institutional investors have written to the Credit Suisse board calling for firmer commitments on coal.

The investors say these should include curbing its general corporate financing, underwriting and advisory services to companies developing new coal and a commitment to fully phase out from coal by 2030 in the OECD and by 2040 in the rest of the world. The latter would bring Credit Suisse in line with recent climate commitments made by HSBC in response to a shareholder resolution filed by ShareAction.

Jeanne Martin, Senior Campaign Manager at ShareAction, said: “Credit Suisse has found itself in lots of controversies recently which have significantly impacted the bank’s reputation. The bank’s incoming Chair should take the opportunity to start afresh and begin restoring Credit Suisse’s reputation by implementing a sector-leading fossil fuel policy, starting with coal.”

Notes to editors

The full investor statement is below. It was signed by seven institutional investors including:

  • Actiam
  • Amundi
  • BMO Global Asset Management
  • Ethos Foundation
  • Folksam

***

Dear Chair,

We welcome Credit Suisse’s commitment to align its financing activities with the 1.5C goal of the Paris agreement and to develop science-based targets within the next 2 years.

We are making this statement today to encourage the bank to operationalise these commitments by taking firm steps to curbs its exposure to coal.

The expansion of coal has long been recognised as being incompatible with the goals of the Paris Agreement, most recently by Europe’s largest bank HSBC. In 2019, a group of 631 investors managing over US$37 trillion in assets acknowledged the need to “phase out thermal coal power worldwide by set deadlines”.

According to the Rainforest Action Network, Credit Suisse is Europe’s third largest financier of coal power and Europe’s largest financier of coal mining over the period 2016-2020. Credit Suisse committed in July 2020 not to finance or provide underwriting services to companies with a coal share of revenue greater than 25%, unless that company has a “credible transition strategy to diversify away from thermal coal and where, in addition, the transaction proceeds make a material contribution to this transition.” However, the bank does not disclose what it considers to be a credible transition strategy away from thermal coal extraction or coal power, as opposed to some of its European peers. Furthermore, the bank’s position on coal is not yet in line with leading practice in the banking sector.

We therefore encourage Credit Suisse to make a timely commitment to:

  • Publish further information on how it assesses companies’ transition strategies away from thermal coal extraction or coal power;
  • Commit to phase out from coal by a specific date, in line with the IPCC’s recommendations which stipulates an exit by 2030 for the OECD, by 2040 for the rest of the world;
  • Help clients develop, publish and implement coal phase-out plans in line with the IPCC’s recommendations no later than December 2023;
  • Taking firm steps to curb its general corporate financing, underwriting and advisory services to companies that are developing new coal mines and coal-fired power plants.

We look forward to continuing our engagement with you on these important issues in the coming months.