Nearly half of Chase’s owners have demanded to know how the bank plans to align its business model with the Paris Agreement.
On the surface, that probably doesn’t sound like an earthquake. But it’s quietly seismic.
by Alec Connon
May 20, 2020
Some earthquakes are so earth-shatteringly disruptive that even people on the other side of the globe hear about them. Others are no more than little tremors, shifts in the ground that we might not even notice as we go about our daily business. To those paying attention, however, even these small quakes can be indicators of great tumult lying just below the surface. In the fight to curtail catastrophic climate change, we may have just witnessed such a tremor.
Yesterday, at JPMorgan Chase’s Annual General Meeting―the bank’s largest shareholder meeting of the year―49.6% of shareholders voted in favor of a resolution that was introduced by shareholder activist organization, As You Sow. The resolution called on the bank to produce a detailed report on how it intends to align its lending model with the Paris Agreement goal of keeping global warming below 2°C. On the surface, that probably doesn’t sound like an earthquake. But it’s quietly seismic.
is the world’s largest funder of fossil fuels. Since the Paris Agreement was signed in late 2015, it has loaned more than $298 billion to the fossil fuel industry―36% more than any other bank on the planet.
And here’s the key thing to know: Without that money, the fossil fuel companies simply can’t afford to build their new mines, pipelines or fracking wells. To take one well-documented example, the Dakota Access pipeline―which fuelled such historic fires of resistance in 2016―cost Energy Transfer Partners (ETP), the company behind the pipeline, $3.8 billion. Two-thirds of that money was raised from bank loans. Without those loans, ETP could never have raised the capital to forge ahead with the pipeline. Wall Street, as activists like those at the Stop the Money Pipeline coalition have been working hard to point out, is every bit as complicit in the climate crisis as the fossil fuel industry itself.
But back to the resolution. So what if 49.6% of shareholders voted that the bank should produce a report on how it will align its business model with the Paris Agreement? Big deal. Well, yes, actually. Votes on shareholder resolutions are very different from electoral votes. In an election, it’s (supposed to be) simple: if you get more than 50%, you win. When it comes to shareholder resolutions, it’s much more nuanced than that.
The important fact to keep in mind about shareholder resolutions is that it is the owners of the company who are doing the voting. What this means is that even resolutions that garner well under half the vote can significantly impact how a company does business.
As You Sow, perhaps the country’s leading shareholder advocacy organization, claim that resolutions that garner anything more than 10% of the vote are difficult for companies to ignore―and a resolution that gets more than 20% support makes it likely that the company will be forced to make at least some changes. After all, what kind of company would ignore the wishes of one-in-five of its owners?
49.6% might not be good enough to win an election, but when it comes to shareholder resolutions it’s huge.
In the end, it all boils down to this: Now that nearly half of Chase’s owners have demanded to know how the bank plans to align its business model with the Paris Agreement, we may just start to see such a plan. As we look ahead, we know only two things for sure. One, we have only got this far thanks to relentless advocacy, activist, and investor pressure. Two, any such plan would involve dramatically less money being made available to coal, oil, and gas companies. And that, well, that really would begin to shift the ground beneath the feet of the fossil fuel industry.
Alec Connon is an organizer with the DeFundDAPL – Seattle Action Coalition, a group that has recently deployed over 25 actions at a dozen Wells Fargo branches. His written work has appeared in Common Dreams, The Guardian, Crosscut, The Seattle Weekly and more. You can learn more about his work here: www.alecconnon.com