Credit Suisse under investor pressure on fossil fuel finance

Credit Suisse is facing shareholder calls to cut its fossil fuel exposure while a new study has revealed European companies’ slow progress on emissions, as pressure mounts on the corporate world to step up its climate efforts.

Investors with €2.2tn under management filed a resolution at the Swiss bank on Wednesday calling for it to slash its exposure to oil, gas and coal assets.

The move came the same day as monitoring group CDP found that European corporate emissions had fallen just 1.5 per cent a year between 2017 and 2019, far below the pace needed to meet the Paris climate goals.

The intervention at Credit Suisse was co-ordinated by charities ShareAction and the Ethos Foundation. ShareAction rallied investors behind a similar resolution filed at HSBC in 2021 that prompted the bank to change its coal policy to avoid a revolt.

Credit Suisse has lent more than $82bn to fossil fuel companies and projects since the 2016 signing of the Paris agreement and is Europe’s top bank for the provision of coal mining finance, according to the two charities.

The bank said it would engage with investors about the proposal and publish information about its fossil fuel exposure in a sustainability report on Thursday.

The analysis of European companies’ emissions reductions, by CDP and consultancy Oliver Wyman, said the slow pace was continuing despite a wave of corporate climate pledges.

Although emissions fell in real terms in 2020 as a result of the pandemic, the drop was consistent with declines in economic and business activity, according to the report based on disclosures from 1,228 companies.

Less than half of the European financial institutions that disclosed data to CDP last year included details about the emissions associated with their investments, the analysis found.

“What we need is a step change,” said James Davis, partner at Oliver Wyman, adding that the emissions data reported to CDP did not provide “any strong evidence” this was happening.

To be on track to limit temperature rises to the Paris goal of 1.5C above pre-industrial levels, reductions would need to be in the range of 4.2-6 per cent annually, according to the Science Based Targets initiative (SBTi), a partner organisation of CDP.

A range of corporate climate commitments and promises to root out environmentally destructive practices, such as deforestation, have been made since last year’s COP26 international summit.

The number of European companies disclosing SBTi-approved decarbonisation targets to CDP jumped 85 per cent to 289 last year.

The CDP report said European groups, which were not translating pledges into action, were on track to miss the 1.5C goal, with “a small cohort of companies” responsible for “most of the positive change in our economy”.

Rob Bailey, partner at Oliver Wyman, said he expected to see the emissions-cutting rate “start to improve” as companies move from focusing on setting targets to implementing them.

Maxfield Weiss, executive director at CDP Europe, said if investors could take “super fast action in the face of crises” such as the Ukraine war, it “raises a question” about whether companies and financial institutions were acting fast enough to tackle climate change.

Between 2017 and 2019, sectors including construction, transport and agriculture reported an average annual increase in emissions from operations and energy use, the report said.

At the same time, only 44 per cent of the 164 banks, asset managers and insurers that reported their activities to CDP disclosed the emissions associated with their portfolios — and most only disclosed data for some of their investments.

Only half of all companies disclosed their supply chain emissions even though these typically represent the bulk of pollution, while just one in 20 had robust targets for emissions, water and deforestation.

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