“This transition to a low-carbon economy is real. And we want to lean towards it, fund it, and help our customers through it, rather than ignore it,” Jon Weiss, CEO of CNN, told CNN. corporate and investment banking at Wells Fargo. Business.
Wildfires and extreme floods are bad for business
Wells Fargo partly views the climate crisis as a risk management issue.
“It doesn’t take a scientist to notice that our customers are affected by climate change,” Weiss said. “When a fire burns much of California or a flood that occurs once a century occurs every five years, it poses a risk to people and companies in its path.”
And Weiss pointed out that “too often it seems that the burden of these climatic events falls on the most vulnerable parts of society who either 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 serious pressure from investors who want to support companies that are seen as part of the solution, not the problem.
“What is important to our investors is important to us. Ultimately, they own our company,” Weiss said. “And I talk pretty loud.”
As part of its climate goals, Wells Fargo promises to pump $ 500 billion in wind, solar and other sustainable financing projects by 2030. This marks an acceleration of the $ 157 billion that Wells Fargo says it has invested in business and sustainable projects since 2012.
“The financial system recognizes climate risk – and is moving towards it,” said Danielle Fugere, president of As You Sow, a nonprofit that promotes corporate social and environmental responsibility. “This is an important signal for the whole economy.”
“We made our mistakes”
“There’s no doubt that we’ve made our share of mistakes – and maybe more than our share of mistakes in the past,” Weiss said. “But we’ve always been a company that cares deeply about the communities we do business in. Maybe what’s changing is that we’re trying to drive from the front, instead of calming down in the shadows.”
Wells Fargo has been a major supporter of the energy industry in the past, a role that has sometimes made the bank a lightning rod for critics.
Why Wells Fargo changes its tone
Despite Monday’s announcement, Wells Fargo has not said goodbye to the fossil fuel industry. At least not yet.
Instead, Weiss said, Wells Fargo intends to help its customers make the transition to a more sustainable future and reduce emissions.
“It’s very much a customer-based strategy, not a statement against our customers,” he said.
Weiss explained that Wells Fargo could, for example, continue to provide funding for shale oil or similar projects. However, he said support would have to be measured in the context of trying to move the bank’s loan portfolio to carbon neutral.
Wells Fargo, like other large banks, has yet to say how it will achieve this long-term goal of reaching zero net emissions by 2050. The bank said it intends to set and disclose intermediate targets for certain consumer-intensive businesses. carbon – including oil, gas and electricity – by the end of 2022 at the latest.
Wells Fargo also said it would set and disclose targets for additional sectors within a “reasonable time” after disclosing the emissions financed for those sectors.
Sierra Club has called on Wells Fargo and other banks to set a firm timetable for phasing out fossil fuel funding.
“While we are encouraged to see Wells Fargo come bundled with these long-term commitments, Wells Fargo – like all major US banks – has a long way to go to stop fueling the climate crisis.” said Ben Cushing, the club’s financial advocacy campaign manager, said in a statement.
Wells Fargo has decided to make the announcement now, Weiss said, due to the urgency of the crisis.
“We were constrained by a sense of responsibility,” said Weiss, “that if we don’t start now, we will be so much later in trying to help our customers and society address this issue.”