Wells Fargo's Dakota Access Financing Prompts a Shareholder VoteBy
Investor group seeks policy to help protect indigenous peoples
Bank has defended its role in financing the 1,172-mile project
Wells Fargo & Co. shareholders will vote next month on whether to require the bank to adopt policies to help protect indigenous groups after protesters targeted its role in financing the Dakota Access pipeline.
The vote was requested by five investors who collectively hold more than $10,000 of the bank’s stock, the company said in a regulatory filing Wednesday. It’s among 10 items on the ballot for the firm’s annual shareholder meeting set for April 25 in Jacksonville, Florida.
Proponents, citing reputational damage from the controversial pipeline project, said the bank should describe how it examines whether deals will hurt indigenous groups, their cultures and access to traditional lands. The company’s board recommended shareholders reject it, because the firm already supports the right of indigenous people to be consulted and strives to do business with customers who abide by those principles and operate responsibly.
“We have a responsibility to respect human rights, including the rights of indigenous peoples to determine their own way of life on their own lands, according to their time-honored cultures, traditions and beliefs,” the board wrote in the filing.
Wells Fargo is among banks that funded a $2.5 billion term loan to Dakota Access LLC, an entity controlled by the pipeline’s builder, Energy Transfer Partners LP. The San Francisco-based lender and 13 others provided $120 million each in lending commitments, according to data compiled by Bloomberg. Citigroup Inc., the loan’s agent, along with units of Toronto-Dominion Bank, Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., each provided $235 million, the data show.
Work on the 1,172-mile (1,886-kilometer) project was temporarily halted last year by the Obama administration after advocates argued the pipeline would damage sites culturally significant to Native Americans including the Standing Rock Sioux, and pose an environmental hazard where it crosses the Missouri River. Reversing that decision was one of President Donald Trump’s first actions after taking office.
In January, protesters gathered at Chief Executive Officer Tim Sloan’s home in San Marino, California, to protest Wells Fargo’s role in the project, according to the Pasadena Star-News. Sloan later defended the loan at an investor conference.
“That credit facility was properly vetted and independently reviewed within Wells Fargo,” he said. “We thought it made sense.”
The ballot item is among a half-dozen shareholder proposals, some of which have been described in previous press reports. They include initiatives to require the bank to look into divesting non-core assets, or issue reports on its lobbying activities or any gap in pay for women and men.