(Thursday 31st March, London) Following years of engagement and months of intense talks with Ethos Foundation, ShareAction, and the 11 institutional investors that filed a shareholder resolution on climate change earlier this year, Credit Suisse has announced that it will introduce:
- New restrictions related to the financing of oil sands and Arctic oil and gas;
- New restrictions around Deep Sea Mining;
- An advisory vote on its sustainability report to shareholders in 2023.
These are important steps forwards reflecting the positive influence of shareholders and the bank’s willingness to listen. Nevertheless, these commitments remain insufficient for investors, as they fail to cover the bank’s main financing and exposures to high-carbon assets, leading shareholders to keep their climate resolution on the ballot.
For example, the bank’s disclosures and targets do not yet capture capital markets activities, despite these representing the majority of the bank’s financing to new oil and gas activities. Earlier this year ShareAction found that almost 80% of the bank’s financing of top oil and gas expanders was in the form of capital markets financing. The bank’s new commitments apply to sectors it has a smaller exposure to than others – $902 million for oil sands by comparison with $15.830 billion for fracking over the period 2016-2021.
Additionally, the bank has also not addressed a number of the requests made by a coalition of investors representing $2.5 trillion to tighten its thermal coal policy at its 2021 AGM, such as providing further information on how it assesses companies’ coal transition strategies. Moreover, from 2024 onwards Swiss companies will be obliged by law to offer binding votes on their sustainability reports, rendering Credit Suisse’s advisory vote redundant.
Jeanne Martin, Senior Campaign Manager at ShareAction said: “Credit Suisse has today missed an opportunity to start afresh, restore trust, and make tackling climate risk core to the Group’s mission by failing to support our investor-led resolution. Whilst we welcome the bank’s recent climate commitments, these fail to cover the bulk of the bank’s financing and exposure to high-carbon assets. We call on shareholders to vote for our resolution – and make their voting decision known to the bank and their peers.”
Credit Suisse has also published a new set of disclosures on its exposures to high-carbon sectors and set an absolute target of a 49% reduction in CO2eq emissions from the oil, gas, and coal upstream and downstream sector by 2030 in its 2021 TCFD report. However, these disclosures and target do not cover capital markets activities. The bank does not currently have plans to extend the scope of its targets and disclosures.
Credit Suisse seems to have already achieved most of its target, as the bank claims have reduced its emissions by 41% from 2020 to 2021. The drop should be interpreted with care however, as Credit Suisse’s target is based on a 2020 baseline, which was an unusual year due to the pandemic.
The co-filing group believes that the bank should enshrine its commitment to align with 1.5C in its articles of association, as several UK banks such as Barclays and HSBC have already done. This would give new directors and sustainability staff a mandate to act boldly on climate, which shareholders believe would have a positive impact on the bank’s reputation, share price, and profitability.
It would also support the bank with restoring its reputation amongst investors through setting a new standard for climate in European banking amidst series of controversies it has faced, which have raised questions about its risk assessment and management processes.
ShareAction will be publishing an in-depth analysis of Credit Suisse’s commitments in early April.
