Wells Fargo & Co (WFC.N) announced new aims to decrease greenhouse gas emissions, including ambitions to reduce “absolute emissions” tied to its financing of oil and gas businesses, according to an executive.
Wells Fargo is the latest major U.S. bank to commit to reducing the emissions it funds via lending, as part of the UN-backed Net Zero Banking Alliance.
The bank’s initial goals are to cut absolute emissions by 26 percent in the oil and gas sector by 2030, compared to 2019 levels, and to lower portfolio “emissions intensity” – a measure of emissions relative to production – by 60 percent in the electricity sector during the same time period.
The parameters, which are identical to those set by competitor Citigroup Inc, get the bank closer to its overall goal of net zero greenhouse gas emissions by 2050.
The bank’s target of reducing oil and gas emissions across scopes 1, 2, and 3 is based on forecasts that take into account expected emissions reductions by businesses and consumer uptake of electric vehicles.
Scope 1 and 2 emissions are direct and indirect greenhouse gas emissions, respectively, but Scope 3 emissions are created by suppliers and partners and are significantly more difficult to measure and reduce.
“We believed the absolute measure would be the best way to take with the oil and gas sector,” said Nathan Lebioda, head of Wells Fargo’s treasury strategic projects.
Citigroup Inc (C.N) stated in January that it plans to reduce emissions from firms across its energy loan portfolio by 29 percent by 2030. Other banks have focused on reducing their clients’ “emissions intensity,” an approach that climate advocates believe falls short.
According to climate campaigners, Wells Fargo gave $272 billion in fossil fuel support from 2016 to 2021, making it the third largest worldwide bank. Wells’ ideals, according to some detractors, clash with its support for fossil fuel growth.
“Any aim that doesn’t tick that box won’t pass inspection with activists or investors,” Alison Kirsch, Rainforest Action Network’s research and policy manager, said in a statement.
Others rated Wells Fargo as better.
By e-mail, Dan Saccardi, program director at the Ceres Company Network, stated, “These aims contain a robust approach that extends beyond lending to cover capital markets activities.”