PNC GHG and Climate Change Risk 2014
|Company||PNC Financial Services Group Inc.|
|Filer||Boston Common Asset Management, LLC|
|Sector||Banking, Financial Services|
|Subject(s)||Climate Change; Greenhouse Gas Emissions|
|Resolved Clause Summary||Report assessing climate risk from financed emissions|
Banks and other financial institutions contribute to climate change through their financed emissions, which are the greenhouse gas footprint of loans, investments, and financial services. A bank’s financed emissions can dwarf its other climate impacts and expose it to significant reputational, financial and operational risks. PNC Financial, Inc. (PNC) has not provided investors with sufficient information to permit meaningful assessment of the risks presented by its financing of greenhouse gas intensive businesses.
PNC is headquartered in a region that is economically linked to the extraction of natural gas and coal. The company stated in its 2013 Corporate Responsibility report that it expects to continue to fund these businesses.
PNC has emphasized the importance of climate change management in its brand reputation, stating in its 2013 response to CDP (Carbon Disclosure Project): “The increasingly eco-conscious business environment has meant that some customers and investors use a company’s response to climate change as a differentiator between potential options. A lack of a clear carbon emissions strategy, or a low perceived action plan, could cause PNC to lose valuable customers and investors, or limit our ability to attract new customers and investors.”
PNC stated that its “credit review process includes due diligence that takes into consideration the environmental impact of a prospective borrower.” PNC claims to perform a “supplemental evaluation for companies in the extractive industries, including an understanding of any significant environmental impacts.” PNC states it takes these actions because it recognizes the “potential risks associated with changing climate conditions that could affect business operations and performance.” (Source: PNC, 2013 Carbon Disclosure Project response)
PNC has stated that, “In addition to the evaluation that we perform on all prospective borrowers, we perform a supplemental evaluation for companies in the extractive industries, including an understanding of any significant environmental impacts.”
However, despite a policy not to extend credit to individual mountain top removal (MTR) mining projects or to a coal producer that receives a majority of its production from MTR mining, PNC continues to finance four of the top nine MTR coal mining companies (Source: Rainforest Action Network, Coal Finance Report Card, 2012). As a result, it is the focus of a consumer boycott. PNC has ignored investors’ requests to provide information detailing its MTR policy implementation or the lending impacts of this policy.
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, PNC’s assessment of the greenhouse gas emissions resulting from its lending portfolio and its exposure to climate change risk in its lending, investing, and financing activities.
Supporting Statement: This request was also made in the 2013 PNC Financial, Inc. proxy. At the 2013 Annual Meeting of Shareholders, 80,614,552 of votes cast by shareholders (22.8%) supported this resolution. The closing price on that day, April 23, 2013, was $67.21 per share, representing a total value of $5.4 billion (Source: Bloomberg).