When banks finance fossil fuels such as coal, oil and gas, they help to accelerate the climate crisis, and in many cases, harm human rights. ShareAction’s Banking Team campaigns on Europe’s largest 25 banks to ensure their financing activities do not harm people and planet. One of the ways we hold banks accountable is by attending annual general meetings (AGMs) to speak directly to their board of directors and chief executives to push for change.
However, this year we realised it could be more challenging than in previous years to persuade banks to raise their ambition. Recent political shifts have emboldened an ESG backlash, which has led to stagnation and even regression of climate action in certain cases. Voluntary alliances that were already flawed have now faltered, shown through the recent weakening of the Net Zero Banking Alliance (NZBA).
Banks are spinning the narrative that they are powerless to act and won’t be able to achieve their targets unless governments take more action. In tandem, banks are lobbying to undermine and weaken sustainability regulation. Recently, the European Banking Federation was a key influencer of the EU’s latest Omnibus proposals, which cut green and social obligations for companies and banks.
The climate crisis will not wait, and there is no time for banks to waver.
We are already seeing a record number of extreme weather events, which are leading to countless lives and homes lost. Rising temperatures are also predicted to negatively impact the global economy, which will have knock-on financial implications for banks, their customers and the public.
So, this AGM season ShareAction staff attended seven AGMs across the UK and France, and volunteer supporters attended a further five in the Netherlands, the UK and Spain. Together, we asked 26 questions at 15 banks’ AGMs. We asked banks to increase their ambition on sustainable finance, to stop financing oil and gas expansion and to respect Indigenous Peoples’ Rights. And in direct response to the current political environment, we called on banks to clarify their lobbying practices, to commit to ensuring democratic shareholder participation at future AGMs, and to stick to their existing climate commitments, rather than roll back. At NatWest’s AGM, for example, we called out the bank’s subtle but significant fossil fuel policy wording change, which will allow it to keep financing oil majors expanding production.
Despite the ESG backlash, responsible investors are determined to hold banks to account on their climate ambition.
This year, we read out four AGM statements signed by a record-breaking number of shareholders at HSBC, Barclays, Standard Chartered and Crédit Agricole’s AGMs. 30 institutional investors representing $1.4 trillion in assets under management (AUM) signed a statement to HSBC calling on the bank to state publicly that it will keep building (rather than backtracking) on its net-zero commitments, and for the bank to consult them in its upcoming climate targets and policies review. This comes after HSBC reduced the ambition of its Scope 1 and 2 emissions reduction targets and dropped its Chief Sustainability Officer from the Board. And for the first time, 21 investors representing over $1 trillion in AUM co-signed a statement on sustainable finance at Standard Chartered. This resulted in the bank’s Chief Sustainability Officer agreeing to meet with the investor signatories to discuss how the bank can increase its financing of renewable power in emerging markets.
Effective collaboration with civil society allowed us to platform affected communities and experts.
At the Barclays AGM, Diane Skidmore, former Director of Fuel Poverty Action, argued that the bank should set a renewable power financing target to help the UK achieve a fairer, more affordable and cleaner energy system. And senior climate scientist Professor Ralf Toumi, Co-Director of the Grantham Institute, questioned Barclays’ continued financing of fracking expansion in the US, noting that the atmosphere does not distinguish between carbon dioxide from short or long-lead projects. In response to his expert intervention, the bank has reached out to Professor Toumi to discuss the climate science further.
At HSBC’s AGM, we asked a question in collaboration with communities resisting LNG expansion, which threatens Indigenous People’s lands in the Rio Grande Valley, Texas, asking if the new Chief Sustainability Officer would meet them. This led to a meeting with the bank alongside Rainforest Action Network and the South Texas Environmental Justice Network, who are on the frontlines of these projects and their impacts. We also facilitated in-person presence of two Global South representatives who are being directly affected by the climate crisis, by lending them ShareAction shares. Patience Nabukalu came to deliver a youth letter calling for an end to fossil fuel expansion, and Avril De Torres from Center for Energy, Ecology, and Development (CEED) in the Philippines came to represent the Protect VIP Campaign, which seeks to protect the ‘Amazon of the Oceans’ from extractivism. Concerningly, HSBC tried to silence their voices on the day, but a show of solidarity from other civil society members who protested the Chair in his attempt to close the Q&A session early led to them eventually being heard.
This follows a worrying trend we’ve noticed of banks denying climate questions by certain stakeholders at AGMs.
A similar situation unfolded at BNP Paribas, where we were interrupted by the Chair when reading out an NGO statement backed by seven European organisations, calling on the bank to set a target to finance grids and battery storage. This was due to dissenting shareholders who protested whenever questions on climate were asked, and the BNP Paribas Chair also closed the Q&A session before Bishop Gerry from CEED could speak. Finally, Santander demonstrated poor practice by moving its AGM to online-only this year, and the bank ignored our supporter activist Annabel’s submitted question on LNG expansion without an explanation.
Despite obstacles such as shifting political headwinds, the ESG backlash, banks’ lobbying, and in some cases, poor AGM governance, we will continue to hold banks accountable for their impact on people and planet. We will keep challenging the narrative that banks are passive and can’t do more to prevent the worst of climate breakdown. Banks wield huge power over the global economy and could enact stronger policies to phase out fossil fuels and ramp up green investment, which we will be urging them to do. And we will continue to empower investors, affected communities, experts and civil society to have their voices heard.
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