A group of shareholders said Wells Fargo has fallen short on its promises to outline publicly its human rights impacts, criticizing the megabank for only publishing a summary of its findings.
Last month, the $1.9 trillion-asset bank
But religiously affiliated investors who pushed for the assessment say the 18-page summary lacks details about what drove the recommendations. Also missing are the opinions of employees, customers and would-be customers who have been wronged over the years.
“I know that they are trying to do something, but this was disappointing,” said Sister Nora Nash, director of corporate social responsibility at the Sisters of St. Francis of Philadelphia. She added that the “voice of the people is not in that document,” noting that it does not even include a breakdown of the people interviewed by the law firm.
Nash and other investors, who are part of the Interfaith Center on Corporate Responsibility, had pushed Wells Fargo for months to release a full report.
The assessment is tied to the United Nations’ Guiding Principles on Business and Human Rights. The shareholder group said that such an assessment by Wells Fargo is particularly necessary in light of the San Francisco-based company’s ongoing regulatory problems.
The bank continues to operate under several consent orders and was hit with a new $250 million penalty in September, with regulators citing continued troubles in its home lending unit. Nash also pointed to a Bloomberg report last week, which found that the bank rejected half of Black applicants who sought to refinance their mortgages in 2020.
In a statement, Wells Fargo spokesperson Kim Erlichson said the bank undertook a human rights impact assessment to “gain better understanding” of how its business practices impact employees, customers and other stakeholders.
Wells Fargo “publicly shared the verbatim priority recommendations” from the law firm’s report, along with “key actions the company is taking or plans to take as we evolve our human rights practices,” Erlichson said.
“We recognize there is more work to do and are committed to ongoing engagement with stakeholders,” Erlichson said.
Recommendations by the law firm, Foley Hoag, made up just two of the report’s 18 pages, with the remainder consisting mostly of the bank’s responses, outlining its actions and future plans.
Foley Hoag recommended that Wells Fargo prioritize issuing a comprehensive human rights policy and “identify potential opportunities to strengthen its human rights due diligence” in a way that “prevents commercial relationships with entities causing serious adverse human rights impacts.”
The law firm also recommended that the megabank expand its teams focusing on environmental, social and governance risks and give “additional weight” to those teams’ recommendations.
In addition, the report said Wells Fargo should ensure that all of its divisions are implementing the bank’s commitment to ensure the workplace is “free from retaliation and discrimination,” particularly at non-senior management levels. The company should also “regularly review and revise” its employee grievance procedures, the report said.
Another workplace recommendation in the report is that Wells Fargo should update its diversity and inclusion strategy “in a manner that sets the bank on a path to be a leader among peer banks.”
The report also said the company should regularly engage in due diligence in its efforts to improve diversity and racial equity, and to help low-wage workers and employees of color in its workplace. It suggested a closer focus on “operations and facilities in India and the Philippines,” as well as implementation of the company’s modern slavery prevention practices.
And the report recommended a review of the bank’s customer remediation processes to ensure its compensation to harmed customers is “proportional to the harm and costs” and takes into account emotional suffering and other factors that are harder to quantify.
The Office of the Comptroller of the Currency specifically mentioned shortcomings in customer remediation in a September consent order, saying that Wells Fargo’s “failure to timely detect, prevent, and quantify inaccurate loan modification decisions” impaired its ability to compensate harmed customers.
Wells Fargo said in the recently released report that in the past it “too often fell short” in its remediation procedures, and that it has “been taking dramatic steps” to improve how it handles customer complaints.
The bank has established a Customer Remediation Center of Excellence that centralizes all remediation activities. It has also created an Office of Consumer Practices that reviews complaint metrics, advises on product changes and offers employee training in how to interact with consumers, including older adults and people with disabilities.
The bank said that the recommendations “align with key priorities for Wells Fargo as we work to transform the company and rebuild trust.” As part of those efforts, Wells Fargo has launched a 10-year banking inclusion initiative that increases its partnerships with Black banks and aims to reduce the number of Americans without a bank account.
Wells Fargo said that it expects to update its existing Human Rights Statement this year, and that its code of ethics includes a section on human rights. That section also directs employees to the bank’s Indigenous Peoples Statement and a Supplier Code of Conduct that lays out a requirement that suppliers comply with all applicable human rights laws. The bank also said it plans to introduce new, voluntary human rights training for employees.
In addition, Wells said it has made progress on its diversity and inclusion goals, pointing to programs aimed at improving the diversity of its leadership and new recruitment strategies that have led to more hires from historically Black colleges and universities and Hispanic-serving institutions.
The bank has added a new diversity performance objective for its senior leaders, including for CEO Charlie Scharf, who has created a Diverse Segments, Representation, and Inclusion department whose leader reports to him.
