Coordinated by Ethos and ShareAction, a group of institutional investors have filed a shareholders' resolution at the bank. Through a proposed amendment to the bank’s articles of association, the coalition asks that Credit Suisse improve its transparency regarding its climate impact and reduce its exposure to the financing of companies active in fossil fuels.
The Ethos Foundation and the NGO ShareAction have brought together eleven institutional investors in recent weeks to file a shareholder resolution with Credit Suisse. The co-filing group is made up of investors representing CHF 2'200 billion of assets under management, including Europe’s largest asset manager Amundi, Actares, the pension fund of the canton of Bern, the pension fund of Berner teachers, CAP Prévoyance, the CIEPP, Ethos Services SA, LGPS Central Limited, the pension of the Swiss Post, Publica and the pension fund of the city of Zürich.
These investors are very concerned about the financial, regulatory, and reputational risks that Credit Suisse exposes itself to by continuing to finance activities that appear incompatible with its own goal of aligning its financing with the Paris Agreement objective (limit global warming to +1.5°C). Their resolution aims therefore to modify the articles of association so that the bank improves its reporting on climate risks. This involves disclosing additional information on the strategy set to align the financing activities with the Paris Agreement objective and to reduce the bank’s exposure to coal, oil and gas assets.
If the resolution were to be voted on by shareholders at the bank’s AGM on April 29, it would be the first climate-related shareholder resolution to be voted on in a Swiss company.
“Banks have a key role to play to tackle climate change, starting with a strong reduction of their investments and financing of fossil energy, says Vincent Kaufmann, CEO of Ethos. We have been engaging Credit Suisse for many years on this issue. While some progresses have been made, it remains the Swiss bank most exposed to fossil energy. Its inadequate response to numerous governance issues as well as its insufficient climate policy has prompted Ethos and several of its members to co-file this resolution requesting Credit Suisse to significantly improve its transparency and re-enforce its fossil fuel financing and investment policy.”
According to the latest “Banking on Climate Chaos” study, Credit Suisse has provided more than USD 82 billion to major fossil fuel companies since the signing of the Paris Agreement (2016-2020). This makes it Europe’s fourth largest fossil fuel financier, and the region’s top bank for the provision of coal mining finance.
The latest ShareAction study published on 14 February 2022 shows that Credit Suisse remains one of most exposed banks to fossil fuels. It also shows that its policy on the financing of unconventional oil and gas is limited and lags behind the practices of the European banking sector. For example, the bank does not impose funding restrictions on companies exposed to Arctic oil and gas, oil sands and fracking. Additionally, it took part in a number of controversial deals in 2021.
“Last week, the IPCC issued its bleakest warning yet on the impacts of climate breakdown, highlighting fossil fuels as a key contributing factor, recalls Jeanne Martin, senior campaign manager at ShareAction. Yet Credit Suisse continues to heavily finance the oil and gas industry, usually with no strings attached. With a damaged reputation to restore, we call on Credit Suisse to use this resolution as an opportunity to start afresh and show leadership on climate change.”
Far from best practice
GFANZ, the umbrella organisation that hosts the Net-Zero Banking Alliance, of which Credit Suisse is a founding member, recently stated that “all scenarios aligned with 1.5°C clearly show that accelerating the phasing out of fossil fuels is essential to achieve the goals of the Paris Agreement”. She also called on her members to phase out coal financing and to consider, among other things, the implications of the IEA's Net-Zero scenario for the energy system and all sectors of the economy.
Unfortunately, Credit Suisse does not seem ready to strengthen its policy of financing companies active in fossil fuels, especially in unconventional fossil fuels. M Despite some progress, particularly in the field of financing companies active in coal, Credit Suisse remains far from existing best practices. The recent departures of those responsible for sustainability within the bank also raise concerns about the bank's ability to deal with these challenges.