Wells Fargo & Co. unveiled new targets to reduce greenhouse gas emissions, including goals to reduce the "absolute emissions" related to its financing of companies in the oil and gas sector, an executive said May 5.
Wells is the latest big U.S. bank to set targets to reduce the emissions it finances through lending, in line with the United Nations-convened Net Zero Banking Alliance.
The bank's interim targets aim to reduce absolute emissions by companies it lends to in the oil and gas sector by 26% by 2030 from 2019 levels, and to reduce portfolio "emissions intensity" - a measure of emissions relative to output - in the power sector by 60% during the same period.
The details, which follow similar targets from rival bank Citigroup Inc., move the bank toward an overall goal of achieving net zero greenhouse gas emissions by 2050.
The bank's goal to reduce oil and gas emissions across scopes 1, 2 and 3 is based on projections that incorporate planned reductions in emissions by companies and consumer adoption of electrical vehicles.
Direct and indirect greenhouse gas emissions are known as Scope 1 and 2 emissions, while emissions generated by suppliers and partners are referred to as Scope 3 emissions, and are considered much more challenging to track and reduce.
"We felt with the oil and gas sector the absolute measure would be the appropriate path to take," said Nathan Lebioda, head of Wells Fargo's treasury strategic programs.
In January, Citigroup Inc C.N said it aims for emissions from companies across its energy loan portfolio to drop 29% by 2030. Other banks have focused on cutting clients' "emissions intensity," a method that climate activists say does not go far enough.
Climate activists have calculated Wells Fargo provided $272 billion in fossil fuel backing from 2016 to 2021, third largest among global banks. Some critics said Wells' goals conflict with its support for fossil fuel expansion.
"Any target that doesn't check that box won't pass muster with activists or investors," said Alison Kirsch, research and policy manager at Rainforest Action Network, in a statement.
Others gave Wells Fargo higher marks.
"These targets include a strong methodology that extends beyond lending to include capital markets activity," Dan Saccardi, program director at the Ceres Company Network, said by e-mail.
Recommended Reading
E&Ps Pivot from the Pricey Permian
2025-02-01 - SM Energy, Ovintiv and Devon Energy were rumored to be hunting for Permian M&A—but they ultimately inked deals in cheaper basins. Experts say it’s a trend to watch as producers shrug off high Permian prices for runway in the Williston, Eagle Ford, the Uinta and the Montney.
Wildcatting is Back: The New Lower 48 Oil Plays
2024-12-15 - Operators wanting to grow oil inventory organically are finding promising potential as modern drilling and completion costs have dropped while adding inventory via M&A is increasingly costly.
Murphy’s Vietnam Find May Change Investor Views, KeyBanc Analysts Say
2025-01-09 - The discovery by a subsidiary of Murphy Oil Corp. is a reminder of the company’s exploration prowess, KeyBanc Capital Markets analysts said.
SLB to Manage Construction of Deepwater Wells for Petrobras
2024-12-11 - SLB will work off nine ultra-deepwater rigs to oversee the construction of deepwater wells as part of the $800 million, three-year deal with Petrobras.
Classic Rock, New Wells: Permian Conventional Zones Gain Momentum
2024-12-02 - Spurned or simply ignored by the big publics, the Permian Basin’s conventional zones—the Central Basin Platform, Northwest Shelf and Eastern Shelf—remain playgrounds for independent producers.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.