2014 Annual Meeting: 10:00 AM EDT, Thursday, May 8, 2014
Charlotte Marriott City Center, 100 West Trade Street, Charlotte, North Carolina 28202
Bank of America has two pending ESG shareholder proposals in 2014.
- ENVIRONMENT: Financing Greenhouse Gas Emissions
- Sisters of the Holy Names have filed this proposal at Bank of America, asking them to report on how they consider GHG emissions in financing activities.
WHEREAS: Banks contribute to climate change through their financed emissions, which are the emissions induced by a bank’s loans to and investments in companies that emit greenhouse gases. A bank’s financed emissions typically dwarf its other climate impacts and expose it to reputational and financial risks. To measure their financed emissions, banks have access to accounting tools developed by the Greenhouse Gas Protocol, a partnership between the World Resources Institute and the World Business Council for Sustainable Development (http://bit.ly/UxdrSh).
The Carbon Tracker Initiative has found that the mispricing of climate risk from the fossil fuel reserves of oil, gas, and coal producers exposes financial institutions that invest in and lend to these companies to significant financial risks (http://bit.ly/1dQiUQR). Banks that finance carbon-intensive electric utilities also face risks from future regulation of greenhouse gas emissions and the declining costs of renewable power relative to coal.
Bank of America has emphasized the reputational risks it faces from the climate impacts of its financing activities. In its 2012 response to the Carbon Disclosure Project, the bank states: “As societal concern about climate change has grown, there has become an increasing awareness among a range of stakeholders of the role the financial services sector can and should have in promoting climate change mitigation through its financing activities… Some of our clients will necessarily be in carbon intensive industries, and reputational risk could arise if we are not developing the appropriate balance of carbon and low-carbon reliant customers or sources of energy in our business mix.”
Bank of America currently reports an estimate of its overall exposure to carbon emissions from its financing relationships with electric utilities. This reporting, though welcome, does not address emissions from the bank’s clients in other industries. These existing disclosures also do not provide shareholders with a detailed and comprehensive assessment of the bank’s exposure to financial and reputational risks from relationships with clients in carbon-intensive industries.
RESOLVED: Given the broader societal implications of climate change, shareowners request that the Board of Directors report to shareholders by September 2014, at reasonable cost and omitting proprietary information, Bank of America’s assessment of the greenhouse gas emissions resulting from its financing portfolio and its exposure to climate change risk in its lending, investing, and financing activities.
- POLITICAL ACTIVITY: Lobbying
- This resolution from the American Federation of State, County and Municipal Employees (AFSCME) asks for annual reports on policy, payments, memberships in groups that write model legislation, information on how these payments occur, and how management and the board of directors monitor them. The proposal says the reports should include
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Bank of America used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Bank of America’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of management’s decision making process and the Board’s oversight for making payments described in sections 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Bank of America is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
Bank of America shareholders will also vote on a resolution on proxy access submitted by Harrington Investments. Bank of America is one of several companies to face this resolution this year. Read the advocacy position from Laura Campos of Nathan Cummings Foundation below to learn more about why proponents consider this to be an important shareholder rights issue.
Download Proxy Preview 2014 to find more greenhouse gas emissions, lobbying, and proxy access resolutions.