LGIM to Vote Against JPMorgan, Citi Bosses on Fossil-Fuel Loans

Legal & General Investment Management said it will support shareholder resolutions asking America’s biggest banks to phase out financial support for fossil fuels.

The UK fund manager, which oversees $1.5 trillion of assets, said in a statement on its website that it intends to vote for proposals that request Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. adopt a “time-bound policy to phase out lending and underwriting for fossil fuel exploration and development.” The banks have guided shareholders not to endorse these resolutions.

As major contributors to greenhouse-gas emissions via their financing activities, banks are under increasing pressure to steer capital away from the fossil-fuel industry and instead use their vast resources to help limit global warming. In the US, however, banks face criticism from both sides, as the Republican Party penalizes firms suspected of embracing environmental, social and good governance goals, such as reducing financed emissions.

“As investors advocating for a just and orderly energy transition, which satisfies all aspects of the current energy crisis (energy security, affordability and sustainability), we continue to emphasize that the boards of financial institutions need to closely consider their strategy and risk appetite towards fossil fuels into the near future,” LGIM said.