Credit Suisse has “an attitude to risk that has to change…. There has to be consequences.”
Those were the words of the bank’s then CEO Tidjane Thiam in 2016.
Six years later – little has changed.
Credit Suisse continues to be plagued by high-profile scandals, including bankruptcies, accusations of spying, sustainability staff fleeing the organization, and even criminal charges to answer.
This has left many questioning the bank’s approach to risk. It’s tarnished its reputation and hit profits too.
Even more worrying is the apparent disregard Credit Suisse shows for climate change - a crisis that must be central to any bank’s approach to risk management.
That’s why we’ve coordinated a group of investors to hold the bank to account, and get it to address the risks associated with fossil fuel financing.
A first of its kind climate change resolution
Supported by 11 investors, including some of Switzerland’s largest pension funds, the resolution asks the bank to clarify its strategy to reduce its exposure to fossil fuel assets, including publishing additional disclosures, fossil fuel policies and targets to achieve this aim.
Such a policy should be aligned with the central goal of the Paris climate agreement to hold global temperature rise to 1.5C.
If accepted by the company, this will be the first resolution of its kind to be voted on at a Swiss company.
Investors are taking one of Europe’s worst climate offenders to task
Credit Suisse is Europe’s fourth-largest fossil fuel funder. It is 19th globally.
In fact, since the Paris Agreement was signed in December 2015, Credit Suisse has provided some US$82.2 billion of finance to fossil fuel companies and projects.
It remains the top financier of coal mining, and its oil and gas policy lags behind its European peers, and best practice for the sector.
Our latest research showed the bank channeled more than US$18 billion into 50 of the top companies expanding oil and gas operations since 2016.
This flies in the face of the warnings from the world’s energy authority – the International Energy Agency – which last year warned there was no space for new fossil fuels in a net-zero world.
Credit Suisse also seems to be ignoring its own commitments to align with 1.5C and a net-zero world by continuing to pump money into companies looking to extract even more fossil fuels.
What’s more, it is lagging behind when it comes to risky unconventional fuels too. Between 2016 and 2018 it funneled US$16 billion to fracked oil and gas, US$16 million to Arctic oil and gas, and US$838 million to tar sands oil.
It currently has no corporate financing restrictions for unconventional oil and gas - its limited policy only has asset restrictions for Arctic oil and gas.
Credit Suisse’s continued love affair with fossil fuels leaves it lagging behind its peers
The rapidly evolving climate landscape has made banks make important steps to ensuring a 1.5C world, including taking steps to reduce their exposure to oil and gas.
Intesa Sanpaolo and Nordea have committed to a phase-out of exposure to certain unconventional oil and gas activities, while La Banque Postale has committed to a complete exit from oil and gas, both conventional and unconventional, by 2030.
This has left Credit Suisse on the wrong side of progress.
This resolution is a vital opportunity for Credit Suisse to build back its broken reputation and catch up on climate change
The high-profile scandals Credit Suisse has found itself at the centre of have left its reputation in tatters.
Its share price has fallen nearly 70 per cent in the last decade.
And ranked against 134 of its peers, Credit Suisse reputation risk dropped 10 points between February 2020 and March 2021 – going from 74th to 84thaccording to risk specialist Nir Kossovsky.
The banks sustainability credentials have taken a particular hit – with the exodus of key staff members, including Lydie Hudson, the bank’s first sustainability executive, Marissa Drew, the bank’s new Chief Sustainability Officer, and Dana Barsky, the bank’s Global Head of Sustainable Finance.
The resolution being filed at Credit Suisse is an opportunity for the bank to begin to rebuild its reputation.
If it is to have a credible response to improving risk management then climate risk will have to be at the core.
This resolution will not only help the bank to ensure it meets its touted climate commitments, catches up with its European peers, and makes a more positive impact, but it will show its customers and its shareholders that it is taking risk seriously.
This is an important moment for Credit Suisse and its investors. We hope they take up this opportunity and support the resolution.