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March 15, 2023

Credit Suisse climate strategy ‘not fit for purpose’, ShareAction says

Credit Suisse logo, London
ShareAction has insisted that Credit Suisse improves its climate disclosures, fossil fuel policies and emissions reduction objectives. (Photo: Dan Kitwood/Getty Images)

The campaigning group has called on Credit Suisse investors to vote against the bank’s climate strategy at its upcoming annual meeting.

Credit Suisse is asking shareholders to support its updated climate strategy, which includes emissions reduction goals for six sectors including oil, gas and coal, but ShareAction, which had urged the lender to tighten its policies, has said the changes do not go far enough. 

Last year, the climate campaign group filed a shareholder resolution alongside Ethos Foundation and 11 institutional investors in Credit Suisse, demanding that the bank improves its climate disclosures, fossil fuel policies and emissions reduction objectives.

ShareAction said that Credit Suisse’s decision to offer shareholders an advisory vote on its climate report this year did not sufficiently address its 2022 resolution. 

In line with a commitment to create interim goals for 2030, the bank has published emissions reduction targets for six sectors: oil, gas and coal, aluminium, power generation, automotive, commercial real estate, and iron and steel.

But ShareAction campaign and project manager Kelly Shields said: “Credit Suisse’s new climate strategy is not fit for purpose. It ignores two of the most crucial areas of fossil fuel financing that would have enabled the bank to reach net zero by 2050.” The group says that the bank’s strategy overlooks fracking and capital markets activities.

She continued: “The bank must urgently update its oil and gas policy, which is one of the weakest in the European banking sector, with a particular focus on fracking.” 

According to a ShareAction report last year, Credit Suisse channelled over $18bn into 50 companies expanding oil and gas operations between 2016 and 2021.

Capital markets activities are key

Credit Suisse published its Task Force on Climate-related Financial Disclosures report for 2022 on March 14. The report sets out the bank’s reduction in absolute financed emissions linked to the oil and gas sector. 

Credit Suisse achieved a reduction by 64 per cent of absolute financed emissions linked to the oil, gas and coal sector by the end of last year, compared with a new 2030 goal of 49 per cent, as it bids to transition its corporate lending portfolio to net zero.

In 2021, the bank announced an emissions reduction plan for oil, gas and coal in line with the Paris Agreement. It is seeking to cut its absolute emissions by 97 per cent by 2050, using 2020 as a starting point.

Last year, the bank also announced plans to wind down its exposure to companies generating revenues from Arctic oil and gas extraction until 2035, while it also set restrictions for lending or capital markets underwriting to companies involved in palm oil, deep-sea mining and oil sands.

Credit Suisse said that it intends to include its capital markets activities in its climate disclosures and 2030 objectives. 

“Our approach will consider prevailing industry standards and evolve with the future capital markets activities of Credit Suisse Group in connection with the restructuring of our investment bank,” it said. 

Credit Suisse announced in 2022 that it was revamping its investment bank, agreeing to sell a significant element to Apollo Global Management, in a deal that it is expected to complete in the first half of this year.

Improved transparency

ShareAction admitted that the bank had slightly improved its level of transparency, having expanded its “client energy transition framework” to cover agriculture and petrochemicals. The bank uses the framework to engage with clients on environmental and social risks and covers eight sectors, having used the framework for oil, gas and coal mining since 2020.

But Shields said: “Until Credit Suisse publishes a time-bound plan to incorporate capital markets activities — which represent the bulk of its financing to top oil and gas expanders — in its disclosures and targets, shareholders must continue to press the bank for greater ambition on climate.

“For these reasons, ShareAction is urging investors to vote against the proposal,” she continued.

“As the bank restructures, it has a vital opportunity to ensure its sustainability commitments are at the core of its business and are ambitious enough to tackle the worsening climate crisis around the world.”   

A Credit Suisse spokesperson said: “Credit Suisse notes ShareAction’s response and also that it has welcomed our extension of our interim 2030 emissions reductions goals for corporate lending from one to six sectors.”

The bank also published its annual report, which revealed that it has “identified material weaknesses in our internal control over financial reporting” for 2021 and 2022.

These relate to its apparent failure to maintain a proper risk assessment process for identifying material misstatements in its financial statements, as well as a failure to monitor its internal controls.

A service from the Financial Times