(Wednesday 9 March, London) A group of eleven institutional investors managing €2.18 trillion have filed a climate resolution at Credit Suisse. Through a proposed amendment to the bank’s articles of association, the coalition of shareholders ask that Credit Suisse improve its climate risk disclosures, bring its coal, oil and gas policies in line with leading practice in the sector, and publish short- and long-term targets to reduce its exposure to coal, oil and gas assets, on a timeline consistent with the 1.5C goal of the Paris Agreement.
The investor coalition was co-ordinated by responsible investment NGO ShareAction and Ethos Foundation with the support of the Swiss Association for Responsible Investments (SVVK-ASIR). If taken to a vote, the resolution will be the first climate resolution to be voted on at a Swiss company.
Jeanne Martin, Senior Campaign Manager at ShareAction, said:
“The message from investors is clear: Credit Suisse must urgently back its long-term net-zero ambition with robust fossil fuel disclosures, policies, and targets. Last week, the IPCC issued its bleakest warning yet on the impacts of climate breakdown, highlighting fossil fuels as a key contributing factor. Yet Credit Suisse continues to heavily finance the oil and gas industry, usually with no strings attached. With a damaged reputation to restore, we call on Credit Suisse to use this resolution as an opportunity to start afresh and show leadership on climate change.”
This intervention follows years of sustained investor engagement around climate. For example, at the company’s 2021 AGM, seven investors representing $2.48tn wrote to the board with a number of climate demands, including that the bank set a firm deadline for a phaseout of coal financing. In November 2021, Credit Suisse went on to publish a new coal policy at COP26. While its commitment to phase out coal and to tighten coal revenue thresholds over time was welcomed, several concerning loopholes remained.
The bank’s coal policy retained the option of funding coal companies for “energy transition” purposes, without a clear definition of what this means in practice, and exempted its asset management arm from following its core tenets. Additionally, the company’s failure to update its inadequate oil and gas policy sparked concern from investors.
Vincent Kaufmann, CEO of Ethos commented:
“Banks have a key role to play to tackle climate change, starting with a strong reduction of their investments and financing of fossil energy. Ethos has been engaging Credit Suisse for many years on this issue. While some progresses have been made, Credit Suisse remains the Swiss bank most exposed to fossil energy. Its inadequate response to numerous governance issues as well as its insufficient climate policy has prompted Ethos and several of its members to co-file this resolution requesting Credit Suisse to significantly improve its transparency and re-enforce its fossil fuel financing and investment policy.”
Since the Paris Agreement was signed in 2015, Credit Suisse has granted financial support worth over US$82 billion to fossil fuel companies and projects. This makes it Europe’s fourth largest fossil fuel financier, and the region’s top bank for the provision of coal mining finance.
Larissa Marti, Climate & Finance Expert at Greenpeace Switzerland, said:
“It is not surprising that investors are demanding more climate responsibility from Credit Suisse. Despite grandiose commitments to climate action, Credit Suisse is responsible for enormous CO2 emissions worldwide with its financing and services to companies in the fossil energy sector. The IPCC recently showed that climate risks are appearing faster and will get worse sooner than previously assessed. As such, time is running out for the bank to finally turn off the money tap for climate wrecking industries.”
ShareAction said that the bank’s oil and gas policy lags significantly behind leading practice in the European banking sector as it only restricts finance linked to projects in the Arctic region. Danske Bank and NatWest, are, meanwhile, implementing policies to cease lending to oil and gas companies without transition plans aligned with the Paris Agreement, while La Banque Postale has announced a strategy to exit the oil and gas sector entirely by 2030.
Credit Suisse took part in several controversial deals in 2021, including one in June with Enbridge, a company with deep links to the oil sands sector. In March, Credit Suisse took part in another deal worth €1 billion with EPH, whose subsidiary EPPE is heavily exposed to coal and continues to acquire new coal assets. These activities risk putting the bank’s commitment to align its financing with the Paris Agreement objective of limiting global warming to 1.5C in jeopardy. Having undergone a restructuring at the end of last year, the bank faces this resolution at a critical juncture, following the departure of top executives Lydie Hudson and Marisa Drew, who were behind its fledgling sustainability push.
Moreover, the company has been involved in a record number of scandals in the past two years, including a whistleblower leak in February revealing myriad possible criminal ties to its accounts. These have raised serious questions around the bank’s risk assessment and management processes and its ability to retain talented staff.
Amidst this series of controversies, ShareAction encourages the bank to begin restoring its reputation amongst investors by indicating its support for the shareholder resolution and setting a new standard on climate in the European banking industry.
The co-filing group is made up of ShareAction and eleven institutional investors including Europe’s largest asset manager, Amundi; the pension fund of Zurich city, Pensionskasse Stadt Zürich; the Swiss Federal Pension Fund, Pensionskasse des Bundes PUBLICA; and Ethos Foundation, composed of 235 Swiss pension funds and public utility foundations.