None Have a Plan for Phasing out Fossil Fuel Finance
Contact: Gabby Brown, gabby.brown@sierraclub.org
Today, Wells Fargo announced new 2030 targets to reach its commitment to net-zero financed emissions by 2050. The plan includes a commitment to reduce absolute financed emissions from the oil and gas sector by 26% and financed emissions intensity from the power sector by 60%. These targets do not explicitly prevent the bank from financing fossil fuel expansion. The announcement follows the release of interim 2030 targets from other major US banks – JPMorgan Chase, Morgan Stanley, Goldman Sachs, Citigroup, and Bank of America.
Between 2016 and 2021, Wells Fargo provided $272 billion in lending and underwriting to the fossil fuel industry, third among global banks. Its fossil financing increased $20 billion from 2020 to 2021, the most of any global bank. Wells Fargo was also the world’s biggest banker of fracking in 2021.
Along with other major US banks, Wells Fargo faced a vote at its shareholder meeting last week, filed by climate-conscious investors, asking the bank to adopt a policy by the end of 2022 committing to proactive measures to ensure that its lending and underwriting do not contribute to new fossil fuel development, in line with the International Energy Agency’s Net Zero Emissions by 2050 scenario. That resolution garnered 11% of the vote at Wells Fargo, enough to gain momentum and be refiled again next year.
“Just like its peers, Wells Fargo has laid out emissions reduction targets that it can’t possibly reach if it continues its business-as-usual support for fossil fuel expansion,” said Sierra Club Fossil-Free Finance Campaign Representative Adele Shraiman. “The science is clear that achieving net-zero financed emissions by 2050 means stopping funding for the expansion of fossil fuels immediately. Investors and the public are growing increasingly frustrated with the gap between that reality and the pledges banks like Wells Fargo are making, and we will keep working to hold them accountable.”
“With an absolute emissions target for oil and gas financing, this announcement underscores that JPMorgan Chase, Goldman Sachs, Bank of America, and Morgan Stanley must add absolute targets to their climate plans,” said Alison Kirsch, Research and Policy Manager at Rainforest Action Network. “But the world’s third biggest banker of fossil fuels has an outsized responsibility to stop pushing us further into climate chaos, by immediately ending support for fossil fuel expansion. Any target that doesn’t check that box won’t pass muster with activists or investors.”
Wells Fargo’s oil and gas target includes upstream and downstream companies, but excludes midstream companies. This is a major loophole, as its #4 and #5 fossil fuel clients over 2016-21 were pipeline companies Tallgrass Energy, with $6.1 billion in lending and underwriting, and Enbridge, with $5.9 billion.
Wells Fargo’s top two fossil fuel clients over 2016-21 were fracking giants Pioneer Natural Resources ($21.0 billion) and Diamondback Energy ($14.2 billion), with Marathon Petroleum ($7.2 billion) in third place.
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