This week, New York City Comptroller Brad Lander revealed that the shareholder proposals submitted by the city’s retirement system have been withdrawn from all three banks.
In brief
On Thursday, New York City Comptroller Brad Lander revealed that the Royal Bank of Canada had accepted a shareholder proposal from his office to disclose its clean energy financing ratios.
This decision follows similar agreements reached with Citi and JPMorgan Chase last month, where they committed to disclosing their ratios of low-carbon energy financing compared to fossil fuel energy financing in response to proposals from Lander’s office and three of the city’s pension fund boards.
Despite these successes, the comptroller’s office, along with the New York City Employees’ Retirement System, Teachers’ Retirement System, and Board of Education Retirement System, still has unresolved resolutions filed at Bank of America, Goldman Sachs, and Morgan Stanley.
Background
In a statement released on Thursday, New York City Comptroller Brad Lander emphasized that the agreements reached with RBC, Citi, and JPMorgan will enable long-term investors to better assess the banks’ adherence to their commitments.
The shareholder proposals, submitted by Lander’s office, urged banks to establish targets related to their clean energy financing ratios, provide regular updates on their progress, align their clean energy financing goals with net-zero commitments, work towards standardizing industry methodologies, and disclose comparable lending ratios.
The comptroller said the transition from how banks finance fossil fuels to financing low-carbon alternatives hasn’t been possible for shareholders to track thus far.
“Despite their commitments to decarbonize, U.S. and Canadian banks have financed over $1 trillion of fossil fuel extraction since the Paris Accords,” Lander said in the release. “As leading public investors, we expect that energy supply ratio disclosure will become a new standard for the banking sector.”
Initially, RBC included the proposal in its proxy vote materials, recommending shareholders to vote against it. Lander expressed hope that the agreements with Citi, JPMorgan, and RBC would encourage Bank of America, Goldman Sachs, and Morgan Stanley to follow suit.
However, Bank of America and Goldman Sachs recommended their shareholders reject the proposal, citing existing clean energy financing ratio disclosures by third parties and upcoming disclosures required by regulatory bodies, respectively. Morgan Stanley’s stance on the proposal remains unknown, as its 2024 proxy materials have not yet been released.
Henry Garrido, New York City Employees’ Retirement System trustee, said in the release that “pacing and scaling clean energy investments cannot be delayed any longer,” for the good of both the planet and the pension system’s members and beneficiaries.
“Greater transparency of capital flows will help NYCERS reach climate goals sooner and reduce climate and investment risk for our members and beneficiaries,” Garrido said.
