On March 8, Wells Fargo, the third largest US bank by assets, announced its commitment to carbon neutrality, announcing that it intends to achieve net-zero emissions by 2050 in alignment with the Paris Agreement.
Wells Fargo is the last of the U.S.’s big six banks to make the net-zero emissions pledge following similar commitments by Goldman Sachs, Citigroup, Bank of America, Morgan Stanley and JPMorgan Chase to align their financing activities to the Paris climate agreement.
This announcement comes on the back of years of investor pressure and the filing of shareholder resolutions to compel financial institutions to address climate change risks, measure and disclose financed emissions and setting net-zero emissions goals.
“Climate change is one of the most urgent environmental and social issues of our time, and Wells Fargo is committed to aligning our activities to support the goals of the Paris Agreement and to helping transition to a net zero carbon economy,” Wells Fargo CEO Charlie Scharf said in a statement.
“The risks of not taking action are too great to ignore, and collective action is needed to avoid the significant impact on our most vulnerable communities. We have a responsibility to help find solutions and are committed to deploying our resources and working closely with our clients in this transition.”
As part of its climate commitments, Wells Fargo, which has approximately $1.9 trillion in assets, is allocating a further $500 billion into sustainable businesses and renewable energy projects by 2030, on top of the $157 billion is has already invested since 2012. Wells Fargo also promises to advocate for policy initiatives and support science-based research that will add clients in their transition to a low-carbon future.
In banking, net-zero goals includes Scopes 1, 2, and 3 financed emissions. Wells Fargo says it achieved net-zero emissions – Scope 1 and Scope 2 emissions – within its operations in 2019. Essentially Wells Fargo and the other banks are pledging to achieve Scope 3 emissions goals and ensure that every business they finance are carbon neutral too.
Investor concern is growing regarding banks’ role in contributing to the climate crisis through their financing fossil fuel projects and seek net-zero commitment as a critical step to mitigating climate impacts and economic and social disruption. The recent deep freeze in Texas and the destructive wildfires in California are recent examples of growing climate impacts across the country that will have investors demanding action to climate change risk across various industry sectors.
“Wells Fargo’s announcement establishes a clear bar for the banking sector,” Danielle Fugere, president of As You Sow, a nonprofit that promotes environmental and social corporate responsibility. “Now that six of the top U.S. banks have made this commitment, we expect that others will join in demonstrating that their own financing is in line with the Paris Agreement’s global net-zero climate goal.”
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Cover image by Griffin Wooldridge.