“This transition to a lower-carbon economy is real. We want to lean on it, fund it, and help our customers instead of ignoring it,” Jon Weiss, general manager of corporate banking and of Wells Fargo. Business.
Forest fires and extreme flooding are bad for business
Wells Fargo sees the climate crisis in part as a risk management problem.
“It doesn’t take a scientist to notice that our customers are affected by climate change,” Weiss said. “When gunpowder burns much of California or every five years a flood occurs once a century, it poses a risk to people and businesses as it passes.”
And Weiss noted that “too often it seems that the weight of these climatic events falls on the most vulnerable parts of society who cannot get out of their way or do not have the same type of stable housing.”
But Wells Fargo and the other big banks are also under strong pressure from investors who want to support companies that consider themselves part of the solution, not the problem.
“What matters to our investors is important to us. Ultimately, they own our company,” Weiss said. “And they talk pretty loud.”
As part of its climate goals, Wells Fargo promises to invest $ 500 billion in wind, solar and other sustainable financing projects by 2030. This marks an acceleration of the $ 157 billion Wells Fargo says it has invested in sustainable businesses and projects since of 2012.
“The financial system recognizes climate risk and moves toward addressing it,” said Danielle Fugere, president of As You Sow, a nonprofit organization that promotes corporate environmental and social responsibility. “This is an important signal for the whole economy.”
“We have made our mistakes”
“There’s no doubt that we’ve made our share of mistakes, and perhaps more than our share of mistakes in the past,” Weiss said. “But we’ve also been a company for a while that cares deeply about the communities we do business in. Maybe what’s changing is that we’re trying to lead from the front, rather than maybe quietly from the shadows. “.
Wells Fargo has been a major sponsor of the energy industry in the past, a role that has sometimes turned the bank into a lightning rod for criticism.
Why Wells Fargo changes its tune
Despite Monday’s announcement, Wells Fargo is not saying goodbye to the fossil fuel industry. At least not yet.
Instead, Weiss said, Wells Fargo plans to help its customers move toward a more sustainable future and reduce their emissions.
“It’s very much a customer-based strategy, not a statement against our customers,” he said.
Weiss explained that Wells Fargo, for example, could still provide funding for shale oil or similar projects. But he said support will have to be measured in the context of trying to shift the bank’s loan portfolio to carbon neutral.
Similarly, Wells Fargo has yet to say how it will achieve this long-term goal. The bank said it plans to set and disclose interim targets for selective carbon-intensive companies, including oil, gas and the electricity sector, by the end of 2022 at the latest.
Similarly, Wells Fargo said it will set and disclose targets for additional sectors within a “reasonable timeframe” after disclosing the emissions funded for those sectors.
Wells Fargo decided to make its announcement now, Weiss said, due to the urgent nature of the crisis.
“We felt compelled by a sense of responsibility,” Weiss said, “that if we don’t start now, we will be much later in trying to help our customers and society deal with this problem.”