“This transition to a lower carbon economy is real. And we want to lean on it, finance it and help our clients through it, rather than ignore it,” Jon Weiss, chief executive of corporate and investment banking at Wells Fargo, told CNN said. Business.
Wildfires and extreme floods are bad for business
Wells Fargo views the climate crisis in part as a matter of risk management.
“It does not take a scientist to notice that our customers are affected by climate change,” Weiss said. “If a wildfire burns down much of California or a once-in-a-century flood occurs every five years, it puts people and businesses at risk.”
And Weiss pointed out that “too often the greatest pressure from these climate events seems to fall on the more vulnerable sections of society that either cannot get out of its way or do not have the same kind of stable housing.”
But Wells Fargo and the other big banks are also under severe pressure from investors who want to support companies that are seen as part of the solution, not the problem.
“What’s important to our investors is important to us. Ultimately, they own our company,” Weiss said. “And they talk quite loudly.”
As part of its climate goals, Wells Fargo promises to pump $ 500 billion into wind, solar and other sustainable financing projects by 2030. This is an acceleration of the $ 157 billion that Wells Fargo says it has invested in sustainable businesses and projects since 2012.
“The financial system recognizes climate risk – and seeks to address it,” said Danielle Fugere, president of As You Sow, a nonprofit that promotes environmental and social corporate responsibility. “This is an important signal for the whole economy.”
‘We made our share of the mistakes’
“There’s no doubt we’ve made our share in mistakes – and perhaps more than we’ve shared in the past,” Weiss said. “But we’ve also always been a business that cares a lot about the communities in which we do business. Maybe it’s changing that we’re trying to lead from scratch, instead of maybe keeping quiet from the shadows.”
Wells Fargo has been a major supporter of the energy industry in the past, a role that has at times made the bank a lightning rod for criticism.
Why Wells Fargo Changes His Tune
Despite the announcement on Monday, 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 to a more sustainable future and reduce their emissions.
“This is a customer-driven strategy and not a statement against our customers,” he said.
Weiss explained that Wells Fargo, for example, can still provide financing for shale oil or similar projects. But he said support should be measured within the context of the bank’s lending portfolio towards carbon neutral.
Like other big banks, Wells Fargo is yet to say how it will achieve this long-term goal of reaching net zero release by 2050. The bank said it plans to set and announce interim targets for selected carbon-intensive businesses – including oil, gas and the power sector – by the end of 2022.
Similarly, Wells Fargo said it would set and announce targets for additional sectors within a ‘reasonable time’ after the financed emissions for these sectors were announced.
The Sierra Club has asked Wells Fargo and other banks to draw up a fixed timeline for phasing out fossil fuel financing.
“While we are encouraged to see Wells Fargo catch up on long-term commitments, Wells Fargo – like all major US banks – has a long way to go to stop the climate crisis from escalating,” said Ben Cushing, Sierra. Club’s campaign manager for financial advocacy, said in a statement.
Wells Fargo has decided to make its announcement now, Weiss said because of the urgent nature of the crisis.
“We were forced by a sense of responsibility,” Weiss said, “that if we do not start now, we will only try so much later to help our customers and society deal with this problem.”