Limit Financing to High Carbon Projects: Too Risky
Wells Fargo has been in the news recently for all the wrong reasons. A few years ago was the retail banking account scandal. This year, one of your data centers caught fire, disrupting all your online services. This month, Congress increased scrutiny of Wells Fargo's financing of high emissions, destructive oil projects.
The questioning of Wells Fargo's CEO on Dakota Access Pipeline financing from Congresswoman Alexandria Ocasio-Cortez was spread widely via traditional and social media. During questioning, it became apparent that the internal risk assessment bodies in Wells Fargo were willing to approve financing for projects related to the Dakota Access Pipeline and similar high-emissions pipelines.
As shareowners, we appreciate that calculated risks sometimes turn out well, and sometimes cause disasters. That said, we worry that the internal risk assessment processes at Wells Fargo are deficient. We know from the retail banking scandal that internal policies at Wells are not without flaws. Now is the time to re-examine financing risks to high emissions projects as well.
Given the oil spill records of similar midwestern Tar Sands projects, immense resistance from local native american communities, and renewed attention from environmentally progressive legislators, not to mention the notorious construction delays from tar sands pipeline projects, we think the risks of involvement with high carbon projects is not acceptable.
Wells Fargo management: please comprehensively re-evaluate your risk assessment department processes, especially to ensure that your staff are well educated in environmental, social, and governance risks.