Banks Face New Pressure to Report on Clean Energy Financing

Key Takeaways:

• Original Proposals: In January 2024, New York City Comptroller Brad Lander filed shareholder proposals with six major banks urging them to disclose their clean energy supply financing ratios. Lander argues that banks should shift investments from fossil fuels to clean energy to align with the Intergovernmental Panel on Climate Change’s goal of net zero emissions by 2050. The proposals highlight the economic benefits of clean energy investments and the inconsistency between banks’ environmental, social, and governance commitments and their persistent financing of fossil fuels.
• Outcomes: Last year, JPMorgan Chase JPM, Citigroup C, and the Royal Bank of Canada RY agreed to disclose their energy supply financing ratios after negotiations with Lander, leading to the withdrawal of three proposals. However, Bank of America BAC, Goldman Sachs GS, and Morgan Stanley MS faced shareholder votes on the proposals, with varying levels of support.
• Renewed Proposals: Lander has filed updated proposals in 2025, with renewed support from New York City pension funds. The boards of Bank of America, Goldman Sachs, and Morgan Stanley recommend shareholders reject the refreshed proposals, citing existing net zero commitments and the relative newness of the metric.
• Context: The proposals come amid broader concerns about banks’ roles in financing the transition to clean energy, with US and Canadian banks facing similar pressures. Indeed, 37.2% of shareholders of Canada’s Canadian Imperial Bank of Commerce CM recently supported a request for an energy supply financing ratio disclosure.

April 22 will mark 55 years since the world celebrated the first Earth Day. It’s also the date of Bank of America’s annual meeting, where investors will vote on increased disclosure of the firm’s clean energy supply financing ratio, the focus of a shareholder proposal advanced by New York City’s Comptroller, Brad Lander. Bank of America is not alone—on April 23, Goldman Sachs shareholders will vote on a comparable resolution.

What Is a Clean Energy Supply Financing Ratio, and Why Does It Matter?

On Jan. 31, 2024, Lander disclosed that he filed shareholder proposals with several of America’s largest banks, requesting that they enhance disclosure of their “Clean Energy Supply Financing Ratios.” [You can see a proposal here.] The ratio represents the “total financing through equity and debt underwriting, and project finance in low-carbon energy supply, relative to that in fossil-fuel energy supply.”

Lander was joined by three New York City pension systems—the Board of Education Retirement System and the New York City Employees’ Retirement System and, for some resolutions, the Teachers’ Retirement System—in filing resolutions at Morgan Stanley, JPMorgan Chase, Bank of America, Goldman Sachs, Royal Bank of Canada, and Citigroup in 2024.

Lander and the pensions argued that by pivoting toward financing clean energy, banks would align with the goal of the Intergovernmental Panel on Climate Change to reach net zero greenhouse gas emissions by 2050. The proposals claimed banks earned more from financing clean energy projects than fossil fuel companies.

The proposals cited Bloomberg New Energy Finance research claiming that to reach net zero, energy supply ratios must hit 4:1 in 2030 (on average, $4 must be invested in clean energy for every $1 dedicated to fossil fuels) and 10:1 after the 2030s. All the banks had 2021 energy supply ratios well below 4:1.

They also highlighted the dissonance between banks’ ambitious sustainability commitments and continued, substantial investments in fossil fuel infrastructure. For example, JPMorgan Chase financed $431 billion in fossil fuel projects between 2016 and 2023, while also agreeing to allocate $2.5 trillion to advance long-term climate solutions and sustainable development between 2021 and 2030. JPMorgan Chase, the country’s leading financer of fossil fuels, Citigroup, the second largest, and Royal Bank of Canada agreed to publicly disclose energy supply financing ratios moving forward. As a result, Lander withdrew his proposals.

At Bank of America, Goldman Sachs, and Morgan Stanley, shareholders cast their votes on clean energy supply financing ratios during 2024 annual general meetings. According to voting data from Morningstar Sustainalytics in 2024, adjusted support for each proposal was above 20%.

It’s commonly expected that support of 20% or so merits a company response. A survey by proxy solicitor Georgeson found that “if a shareholder proposal not supported by management receives 20% or more support but does not pass, investors will expect to see a formal response from the company to shareholders.” Indeed, the UK Corporate Governance Code expects a company to take certain actions if 20% or more of votes are cast against the board recommendation.

Bank Stocks Rallied Before 2025 Proxy Votes

In 2025, Lander is asking four banks to disclose their energy supply financing ratios: Bank of America, Goldman Sachs, Morgan Stanley, and Wells Fargo WFC in the US. From mid-October to mid-March, the stocks of these banks outperformed both the Morningstar US Market Index and the S&P 500, with Goldman Sachs beating both indexes by nearly 50% in late February as the stock hit its peak performance since the beginning of 2024.

New Energy Supply Financing Resolutions in 2025 Proxy-Voting Season

In 2025, Lander is again pressuring Bank of America, Goldman Sachs, and Morgan Stanley to improve disclosure of clean energy supply financing ratios. Lander is supported by New York City Police Pension Fund and New York City Teachers’ Retirement System in his filings with Bank of America and Goldman Sachs. New York City Employees’ Retirement System is also listed as a beneficial owner in Lander’s filings with Goldman Sachs.

In the new slate of proposals, Lander argues that Bank of America, Goldman Sachs, and Morgan Stanley can no longer avoid disclosure of energy supply financing ratios, as JPMorgan Chase, Royal Bank of Canada, and Citi’s 2024 commitments “demonstrate that disclosure is feasible” and, in fact, “a leading market practice.” Lander also notes that the resources available to the banks to disclose energy supply financing ratios have meaningfully improved since last April; in September 2024, for example, BloombergNEF released a banking-specific Implementation Guide for the metric.

Boards at Bank of America and Goldman Sachs recommend shareholders vote against the updated proposals. Bank of America’s board claims that refining a methodology for their energy supply financing ratio and disclosing such a process would detract from it “delivering” on its current climate strategy. Goldman’s board contends that the firm’s preexisting commitments to clean energy transition initiatives, such as setting emissions intensity targets for energy, power, and other relevant sectors, are also sufficient. Goldman, in its proxy materials, described how it failed to reach a resolution with Lander and the pension systems despite multiple engagements in the past year.

Morgan Stanley’s board also recommended that shareholders reject Lander’s energy supply financing proposal, noting that the firm has already mobilized significant resources to meet its goal of financing $1 trillion in sustainable projects, $750 billion of which must be allocated to “low-carbon and green solutions.” It also says the metric is “nascent” and nonstandardized and lacks a direct tie to emissions outcomes, those which they argue currently guide the firm’s climate strategy. Morgan Stanley shareholders will be the last to cast their votes on Lander’s refreshed proposals, on May 15, 2025.

Wells Fargo shareholders will also vote on an energy supply financing ratio proposed by Lander on May 2.

Berkshire Hathaway, Canadian Banks Face Climate Proposals

Other shareholder advocates are prodding financial companies to publish clean energy supply financing ratios. Berkshire Hathaway BRK.B shareholders will vote on a proposal, from the As You Sow foundation, that the firm calculate and publish an energy supply financing ratio.

Meanwhile, three Canadian banks—the Canadian Imperial Bank of Commerce, the Toronto-Dominion Bank TD, and the Bank of Montreal BMO --face clean energy financing ratio resolutions this proxy season, all backed by the Shareholder Association for Research and Education, an organization acting on behalf of PFA Pension at CIBC and the Pension Plan of the United Church of Canada at TD Bank. According to data from Sustainalytics, at CIBC’s annual general meeting on April 3, 2025, 37.2% of shareholders supported the SHARE organization’s clean energy financing ratio proposal. This level of support is approximately 10 percentage points higher than support for energy supply financing resolutions at major US banks in 2024.

Pensions Drive Climate Progress as Banks Cool on Net Zero

Votes on Lander’s proposals come just months after American banks withdrew en masse from the Net-Zero Banking Alliance, following growing pressure to abandon environmental goals. Founded in 2021, the group is intended to push global financial institutions to align activities with a net zero future in which global temperature rise is limited to 1.5 degrees Celsius in the near term. As of early April 2025, all six US banks at which Lander and the pension systems have filed proposals on energy supply financing ratios—Goldman Sachs, JPMorgan, Citigroup, Morgan Stanley, Bank of America, and Wells Fargo—have abandoned membership in the NZBA. In addition, every Canadian bank that Lander and the pensions have targeted for engagement over the past two years—RBC, TD, BMO, and CIBC—has exited the alliance.

At the same time, pension funds are emerging as key actors seeking to drive continued progress on climate goals. In addition to energy supply ratio proposals, for example, Lander has advocated that New York City pension systems representing over 700,000 employees halt “future investments in midstream and downstream infrastructure (e.g. pipelines, LNG terminals) in their funds’ private equity and infrastructure portfolios.”

“A fair number of public-sector pension funds have taken more of a lead on sustainability issues as they have a different perspective looking over a multidecade view of risk,” says Lindsey Stewart, director of stewardship research and policy for Morningstar Sustainalytics. “Their view of what is material may be different than a horizon of three to five years, so they have emphasized sustainability in a way that a lot of other fiduciaries have not.”

Indeed, for asset owners like pensions, environment and climate are top of mind, trumping social and governance factors, according to the Morningstar Voice of the Asset Owner Survey. “If climate is financially relevant for the largest and most influential institutional investors, we can be sure that climate is going to be on the radar for the companies that they invest in,” writes Thomas Kuh, head of ESG Strategy at Morningstar Indexes.