Credit Suisse investors call for tougher coal finance policy: Letter

0
8

LONDON/ZURICH (REUTERS) – Credit Suisse investors managing US$2.5 trillion (S$3.3 trillion) have called for the bank to take a tougher stance on coal financing, amid concern its current policies are too lax, a letter seen by Reuters showed.

The role of lenders in financing the activities of companies responsible for the major share of greenhouse gas emissions has increasingly been the focus of investors and policymakers, keen to accelerate climate action.

Thermal coal, used to generate electricity, has been a focal point as it is one of the heaviest-emitting fossil fuels and investors are eager to see it phased out. A similar investor group has already won a pledge to do so from HSBC and is urging Barclays to follow suit.

While backing Credit Suisse’s pledge to align its financing with the Paris Agreement on climate and set science-based emissions-reduction targets within two years, the investors said they also wanted “firm” operational steps to curb coal lending.

Since shareholders cannot ask questions of the board at the company’s virtual annual general meeting on Friday (April 30) – which will be overshadowed by the bank’s losses from investment fund Archegos – the investors, including one of Europe’s biggest, Amundi, wrote to the board on Thursday laying out their demands.

Coordinated by responsible investment NGO ShareAction, the group also includes the Ethos Foundation, which advises 225 Swiss pension funds and public utility foundations and whose members hold between 3 per to 5 per cent of the company’s stock, as well as BMO Global Asset Management, Actiam and Folksam.

In the letter, the group said the expansion of the coal industry had “long been recognised as being incompatible with the goals of the Paris Agreement”, which requires countries to get to net-zero carbon emissions by 2050.

Citing research from the Rainforest Action Network showing Credit Suisse to be Europe’s third-biggest funder of coal power and Europe’s largest backer of coal mining between 2016 and 2020, the letter said the bank was lagging peers on the issue.

Last July, the bank said it would stop funding or underwriting