Investors say banks must toughen climate policies or face AGM rebellion

Investors managing $4.2 trillion called on some of the world’s biggest banks to toughen their climate and biodiversity policies or risk rebellions at their next annual meetings. The 115 investors, including Aviva Investors and M&G Investments, said that they wanted banks to take more action to tackle the climate change. And this is by aligning their lending with the Paris Agreement on climate.

Many banks have already signed up to voluntary initiatives such as the Net-Zero Banking Alliance (NZBA) and the investors says that quicker change is needed. The letter, coordinated by campaigners ShareAction, was addressed to 63 banks. And this includes HSBC, Standard Chartered and NatWest. The International Energy Agency report stated that there should be no more new fossil fuel projects after this year. And this is mainly for the world to reach its goal of net zero emissions by 2050.

NZBA signatories have agreed to begin setting out climate targets by the end of next year. And the investors said that they wanted to see 5 to 10-year targets in place before the companies’ annual general meetings next year. Their climate plans should be aligned by the banks with the IEA’s net-zero scenario. Ahead of the United Nations’ next biodiversity conference in China in October, the investors called on the banks to commit to publishing a biodiversity strategy, stating that they wanted to see a response by Aug. 15.

The investor letter stated that the progress against these issues may be taken into consideration within investors’ 2022 AGM voting action and engagement activities. In response to this, an HSBC spokesperson said that they look forward to continue their engagement with ShareAction and provide a constructive response to their letter in due course. StanChart said that it had made major strides in its coal policy, and has pledged to put its transition strategy to a shareholder advisory vote next year. Banks including HSBC and Barclays have strengthened policies on tackling climate change in the past year in response to pressure from ShareAction and other groups.

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