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Banks’ fossil fuel finance is under more scrutiny than ever

As global temperatures rise, so do tensions at banks’ AGMs. But that hasn’t stopped investors, campaigners and people on the front line of the climate crisis holding bank boards accountable.

The curtain has now fallen on the 2023 banking AGM season, concluding a dramatic display of powerful investor pressure, noisy disruptions, an historic takeover, and new commitments across the European continent.

Scrutiny of bank bosses is growing every year, with AGMs attended by growing swathes of concerned citizens from around the world.

Those turning up include individual shareholders, scientists, activists, journalists and communities directly affected by the extractive projects banks continue to finance.

At ShareAction, we played our part by amping up our engagement at AGMs and coordinating a series of interventions by investors – so what did we learn?

Some investors are increasingly deploying engagement with banks’ AGMs as a powerful stewardship tool, which is having impactful results.

This AGM season we saw investor appetite for both written and verbal engagement with European banks swell.

Back in February, we co-ordinated letters backed by investors to Barclays, BNP Paribas, Crédit Agricole, Deutsche Bank and Société Générale, urging these banks to restrict their financing of new oil and gas. The group of investors manages over US$1.5tn, making this a serious intervention.

This caught the attention of all five major banks, leading to meetings with Barclays and BNP Paribas to discuss their oil and gas financing further.

The investor pressure clearly worked. Just days before its AGM, BNP Paribas announced it would no longer finance new oil and gas fields. The bank’s move means nearly half of the 25 top European banks have now made this commitment.

It’s not just campaigners making their voices heard at AGMs.We coordinated two investor-backed questions to the Board of Directors at Barclays and BNP Paribas AGMs. Barclays were asked what action they plan to take on new oil and gas as a follow up to the letter in February. At BNP Paribas, investors wanted to know how the bank plans to address the indirect fossil fuel financing they arrange – known in the industry as ‘capital markets facilitation’.

Investors are taking their engagement with companies they invest in to new heights by engaging with them at their AGMs, but there’s more work to do., We’ll keep working with investors to place effective pressure on banks to enact more ambitious change.

We’ve strengthened our relationships with our allies, so we can be bolder in the future.

This year, our Banking campaigners attended more AGMs in-person than ever before, visiting six European cities, and addressing the Boards of some of Europe's largest banks for the first time.

We asked (or helped others to ask) 20 questions at 12 European banks’ AGMs, ensuring climate and human rights were placed firmly on their agendas.

The questions we asked ranged from banks’ fossil fuel policies, to indirect financing for fossil fuels, oil and gas expansion, fracking and lobbying transparency – each one carefully selected based on our assessment of individual banks in ShareAction’s most recent banking survey.

Our increased presence was mostly welcomed, strengthening our ties with banks' sustainability teams and other campaigners on the ground. In most cases, our AGM questions on indigenous land justice garnered warm responses from Boards hoping to communicate further with ShareAction when developing policies in this area.

But others weren’t so happy to see us.

At BNP Paribas’ AGM, shareholders advocating for more robust climate commitments were booed and shouted down by enraged anti-ESG shareholders, interrupting the Q&A and forcing the Chair to intervene.

But the voices of climate activists disrupting Barclays’ and HSBC’s AGMs were even louder. The spectacle of Money Rebellion’s rejigged rendition of the Spice Girls’ ‘Stop Right Now’ reminded banks of the reputational risks they face if they fail to take bolder action on climate.

Communities directly affected by fossil fuel expansion are making their presence at AGMs felt, putting harmful projects on the radar of the banks which finance them.

Following our work on the ‘Indigenous peoples against fracking’ tour in 2022, we co-wrote several questions with indigenous activists Bekah, Christopher and Oli, which followed up on their meetings with HSBC, Barclays, and Credit Suisse. These questions related to the expansion of LNG terminals being built to support fracked gas in their communities in Brownsville, Texas and gas pipeline expansion in Huachinango Puebla, Mexico.

Major banks financing the most extensive extractive projects harming indigenous people and Global South-based communities are usually headquartered in the Global North.

Given the vast geographical gulf and power imbalance between such large institutions and affected communities on the ground, giving those resisting oil and gas expansion on the frontlines a voice at AGMs is an important lever for climate justice.

This season we also supported our friends at Urgewald, who welcomed CEED campaigners from the Philippines resisting LNG expansion in the Verde Island Passage, and we submitted further AGM questions on behalf of affected communities facing human rights abuses and violations of their sacred lands.

We expect engagement from frontline communities with banks to grow, and we look forward to facilitating these connections in the future.

In conclusion, as global temperatures rise, so do tensions at banks’ AGMs. But this won’t deter investors, campaigners and affected communities from holding major banks boards accountable.

We will continue to coordinate with these groups to maximise impact, challenging banks to develop robust fossil fuel policies which have a chance of safeguarding a 1.5C future.

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