The World Bank/IMF Spring Meetings start today, and climate change is high on the agenda, alongside how to make the banks more responsive to the needs of developing countries, many of which face intertwined debt and climate crises
Welcome back to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
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Bank annual shareholder meetings confront climate resolutions
Following this month's contentious and exclusionary Royal Bank of Canada (RBC) shareholder meeting, more major bank annual general meetings are on tap. TD Bank, which expanded its fossil fuel financing more than any other Canadian bank last year, is set to hold a vote on numerous climate-related resolutions on Thursday. Next week, we’ll see Citigroup, Wells Fargo, Bank of America, and Goldman Sachs face votes on numerous environmental, social, and governance proposals that their managements are resisting.
Last week, New York State Comptroller Tom DiNapoli urged shareholders to support near-term climate targets and emission reductions in lending and underwriting at many of the big banks. Watch voting decisions of key asset owners, particularly public pension funds, after some, like CalPERS, failed to back climate resolutions at the banks last year.
These meetings come on the heels of the 2023 Banking on Climate Chaos report, which last week revealed that RBC was the top financier for the fossil fuel industry in 2022, displacing JPMorgan. Collectively, banks funneled $673 billion into fossil fuel companies last year.
ESG SMS
Get your burner phones ready… After the conservative meltdown over Bud Light’s partnership with a transgender TikToker, Consumers' Research is launching a new service called "Woke Alerts". The alerts will push texts to grocery shoppers, informing them of brands accused of taking politically progressive positions. The organization is launching a six-figure digital ad campaign to encourage sign-ups and has flagged Anheuser-Busch and Jack Daniels as their targets. Consumers’ Research, led by Leonard Leo associate Will Hild, has been on the frontlines of the attack against “woke” Wall Street.
Jumping on the mobile bandwagon, the right-wing Free Enterprise Project is releasing its new Proxy Navigator phone app that will provide subscribers the ability to vote their values at companies’ annual general meetings this year. This week, the target is Levi Strauss & Co.’s Board of Directors, specifically CEO Charles Bergh, claiming Levi’s is “one of the most obnoxious corporate proponents of equity-based discrimination and of surrender to the climate catastrophists.”
Gensler’s House Hearing
Securities and Exchange Commission (SEC) Chair Gary Genlser will be in the hot seat tomorrow when he appears before the Republican-controlled House Financial Services Committee for the first time. There will be plenty of ground to cover after some of the largest banking failures in history, persistent inflation, the ‘crypto winter,’ and climatechangerisks raising the specter of a recession. House Republicans are expected to be on the attack and are likely to raise questions about the SEC overstepping its mandate. The commission is working on several proposed rules to provide disclosure and transparency into looming financial risks, including climate change.
Where’s the money?
The spring meetings of the World Bank and International Monetary Fund concluded with limited progress on debt relief and the overall international finance reform agenda. As expected, the World Bank members endorsed an increase in lending capacity, freeing up $5 billion more each year for middle-income and credit-worthy low-income countries. Saudi Arabia and Russia, meanwhile, called on the Bank to invest in risky and unproven carbon capture technology. A World Bank executive board member representing 23 African countries emphasized the need to ensure climate and development goals are addressed in tandem. And while incoming Bank president Ajay Banga has said you can’t “unwind the two challenges of development and climate and segregate them,” there remain calls for the World Bank and IMF “to stay in their lane.”
US Treasury officials spent the week trying to draw attention to China’s approach to debt, but as one developing world representative apparently told Larry Summers: “Look, I like your values better than I like China’s. But the truth is, when we’re engaged with the Chinese, we get an airport. And when we’re engaged with you guys, we get a lecture.”
Discussions on the international finance reform will continue at the France summit in June, G20 in September, annual World Bank/IMF meetings in Morocco in October, and COP28 in the UAE in December, among others. As Barbados PM Mia Mottley said, “We can not go to COP28 with promises. We need to go with a record and then we start the conversations.”
