Bank chairs backtracking on climate commitments could face shareholder revolts

Bank chairs who water down their lenders’ climate commitments this year could face embarrassing shareholder revolts as campaigners try to hold bosses to account for environmental backtracking.ShareAction, a campaign group for responsible investment, will be issuing detailed reports to pension funds and asset managers in the coming weeks, outlining whether 34 of the world’s largest lenders are sticking to their climate goals.Its reports will closely analyse any changes in lenders’ environmental policies, which are usually published alongside their annual reports.The UK’s largest banks will be among the first under the microscope, with NatWest, Lloyds and HSBC all due to release their annual reports by the end of February. Barclays will publish its annual report on Tuesday.ShareAction will call on institutional shareholders to vote against the re-election of any chair who they believe is overseeing a climate row-back. Those votes will take place at annual shareholder meetings, due to begin this spring.Kelly Shields, ShareAction’s senior campaign manager on its banking programme, said while this was unlikely to result in any boss being removed, it was a symbolic move that would send a personal message to directors.Shields is hoping to “slow down this trend of [climate] backtracking, and send a signal to the wider sector that backtracking comes with consequences”.“These directors are getting nodded through with 98-99% of the vote,” she said. “Even a small amount knocked off of that can send quite a strong signal, and it does make it a bit more personal. That director hopefully feels responsible and feels emboldened to act, or at least engage with investors on the issue.”ShareAction’s campaign – which will involve rallying some new and existing supporters in the investment world – comes as banks and other financial firms come under fresh pressure over their green commitments since Donald Trump’s return to the White House last year.The Republican president’s anti-green agenda has emboldened rightwing climate deniers and fuelled a renewed push for oil and gas production, putting pressure on banks to ramp up financing for fossil fuel companies.It has notably led to a series of defections from the UN-backed net zero banking alliance (NZBA), which required members to ensure their policies would lead them to hit net zero emissions targets by 2050 or earlier.The withdrawal of key NZBA members, including JP Morgan, Citigroup and Goldman Sachs as well as the UK lenders Barclays and HSBC, eventually led to the group’s demise in September.HSBC announced last year it was delaying important parts of its climate goals by 20 years and watering down environmental targets as part of a new long-term bonus plan for its chief executive, Georges Elhedery.“We really want banks to reassess this and do what’s needed to make sure that we’ve got long-term financial stability and are prioritising people and planet,” Shields said.