Wells Fargo is the latest big bank to commit to a 2030 target for reducing greenhouse gas emissions across its exposure to the fossil-fuel and power sectors.
The target covers both the company’s lending and capital markets activity, offering interim markers ahead of its previously announced goal of reaching net-zero emissions by 2050.
San Francisco-based Wells Fargo said it will aim to reduce the emissions from its exposure to the oil and natural gas sectors by 26%, while also cutting nearly two-thirds of the emissions from its power-sector portfolio, within the next eight years.
The targets are the result of “actual actions that our clients are already focused on taking,” Nathan Lebioda, head of treasury strategic programs at Wells Fargo, said in an interview.
“The intent is to identify transition opportunities within any given sector with a client base that’s exploring development of new technologies and rolling out additional capital stock that is more energy-efficient.”
The details of Wells Fargo’s announcement drew a mixed reaction from Alison Kirsch, a policy research manager focused on climate and energy at the Rainforest Action Network.
Reducing "absolute" fossil-fuel emissions makes Wells Fargo’s commitment “one of the stronger targets” among major U.S. banks, Kirsch said. But she was also critical of Wells Fargo’s failure to rule out future oil and natural gas investments.
“Wells Fargo has just missed another opportunity to end its financing for the expansion of fossil fuels,” Kirsch said.
Bank of America, Citigroup and JPMorgan Chase have already set interim 2030 targets for emissions. For example, Citi established a 29% reduction target for financed emissions for the energy sector as well as a 63% reduction target for emissions intensity for the power sector.
Large U.S. banks are setting the targets amid pressure by shareholder activists to respond to climate change, and as the Securities and Exchange Commission considers new environmental disclosure regulations.
Last week, shareholders at Wells Fargo, Citigroup and Bank of America
Wells Fargo’s 2030 plan is based on a methodology the bank developed using guidelines set by the Net-Zero Banking Alliance, with targets aligned with recommendations from the Network for Greening the Financial System.
Wells Fargo said that it is aiming to reduce its Scope 1, 2 and 3 emissions from its oil and natural gas holdings, according to an outline of the bank’s emissions plan.
For the power sector, Wells will only target Scope 1 emissions produced by sources that a client of the bank owns.
Wells Fargo’s plan goes a step further than some other banks by committing to cut “absolute,” or physical amounts, of oil and natural gas emissions. Wells Fargo said it also aims to reduce 60% of the “intensity” of its power-sector emissions, which measures the production of greenhouse gasses related to units such as emissions per person or dollars generated.
As big banks begin to implement the goal of reaching net-zero emissions by 2050, interim targets will help “lay out a more actionable pathway,” said Dan Saccardi, a program director at Ceres, a nonprofit organization that focuses on sustainable finance.
“What we’re looking to see is the further expansion of these 2030 interim targets to cover sectors that haven’t yet been addressed, as well as how banks will be engaging with these companies,” Saccardi said.
