‘Climate conflict’: 4 in 5 UK bank directors have connections to high-emitting corporates
An analysis of the activities of directors at the UK's biggest banks has revealed that almost 80% have close ties to corporates in industries linked to climate change and pollution - which could undermine their net-zero commitments.
Conducted by investigative environmentalist platform DeSmog, the analysis covered 64 incumbent directors at the UK’s biggest banks, including Barclays, HSBC, Lloyds, Standard Chartered and Natwest.
It concluded that almost one-quarter of the directors have a current or past connection to the fossil fuel industry. Links include being a current director or advisor, or a former senior-level employee, or holding significant amounts of shares.
When the scope is widened to take in other high-emitting sectors including mining and aviation, as well as US-based banks that have historically backed the fossil fuel industry to a greater extent than their UK counterparts, almost 80% of directors are covered.
Names cited by DeSmog include Standard Chartered’s director Gay Huey Evans, also a non-executive director at Conoco Phillips; Standard Chartered’s board member Byron Grote, also director of Anglo American; Barclays director Tushar Morzaria, also a director at BP; Barclays director Brian Gilvary, former chief financial officer at BP and executive chair of INEOS Energy, and NatWest director Howard Davies, former chair of the Airport Commission, which backed the third runway at Heathrow.
Also named are HSBC directors Pauline Van Der Meer Mohr and Irene Lee, who have been involved with Shell and Noble Group respectively; HSBC director Jose Antonio Meade Kuribrena, also a director at Alfa; Llyods director Lord Lupton, who holds shares in Shell and Rio Tinto, and NatWest board member Mark Seligman, former director of oil firm BG Group.
“These individuals have spent their careers immersed in the norms and ideology of those high-carbon industries; there is a concern that such experience makes them ideologically favourable to the organisations responsible for driving the climate crisis,” DeSmog researcher Rachel Sherrington said.
“But the directors have an opportunity to prove people wrong. Banks have a significant role to play in addressing the climate crisis by cleaning up their portfolios and removing support for environmentally damaging industries. Public support for scientifically-led action on the climate crisis is high, and the directors of the UK’s banks have the chance to put themselves on the right side of history.”
All of the banks named by DeSmog have climate commitments of some kind, with many having set more ambitious targets since the UK Government enshrined the 2050 net-zero target in law.
Barclays announced a commitment to net-zero financed emissions by 2050 last year, as did HSBC. Lloyds Banking Group is aiming to halve financed emissions by 2030 after it was ranked bottom in a ShareAction table on climate action by UK banks. Standard Chartered does not have an overarching target for financed emissions but is targeting net-zero operations by 2030, by which point it will have funnelled $40bn of project financing into sustainable infrastructure and $35bn into solar and wind energy. NatWest is targeting climate-positive operations by 2025 and striving to halve financed emissions by 2030.
However, some of these plans have faced criticism from investors, green groups and the general public over their small print. HSBC is currently facing a shareholder motion that would require it to decrease its exposure to fossil fuels. A similar resolution has also been lodged at Barclays.
Net-zero financed emissions
In related news, US-based bank Wells Fargo has this week announced a commitment to reach net-zero financed emissions by 2050. This means that six of the nation’s largest banks have now set such commitments, as similar visions were recently announced by CitiGroup, JP Morgan Chase, Morgan Stanley, Bank of America and Goldman Sachs.
Wells Fargo has stated that its approach to reaching net-zero financed emissions will include developing interim targets for carbon-intensive portfolios, following initial baseline measurements and disclosure. This piece of work will be completed by 2022. Clients will be supported to achieve these targets. The bank has not outlined measures relating to divestment or stricter future exclusions at this point.
At the same time, however, the bank will increase investment in low-carbon industries. It is targeting $500bn of financing for what it calls sustainable businesses and projects by 2030. Included in this cohort are existing low-carbon solutions like renewable energy and electric transport, as well as R&D into emerging technologies.
Wells Fargo had been facing increasing pressure to bolster its climate provisions. A recent study from Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club outlined its extensive activities in financing fossil fuels since the Paris Agreement was ratified. It has also received heat from NGO As You Sow.
As You Sow’s president Danielle Fugere said: “Wells Fargo’s announcement establishes a clear bar for the banking sector — now that six of the top US 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.
“Frameworks like the Partnership for Carbon Accounting Financials can help create global consistency in measuring and reporting progress. We look forward to seeing Wells Fargo take the next steps on this critical pathway.
“We underscore that a net-zero commitment is only the beginning of this important process. We will be looking to Wells Fargo to fill in the details of its climate plans by setting interim targets and transparently reporting progress toward those goals.”
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