Citi, JPMorgan and Royal Bank of Canada will disclose a new climate report metric outlining their financing ratio of low-carbon energy to fossil fuels under an agreement brokered by New York City comptroller Brad Lander.
Lander, serving as the investment advisor and custodian of the city’s pension funds, announced on Wednesday that the three banks will disclose the new metric. In exchange, the pension funds managed by Lander will retract shareholder resolutions previously demanding such disclosures at each bank.
In a statement, Lander said the agreed disclosure from the three banks will “more effectively measure how well they are or aren’t living up to their commitments”.
“As leading public investors, we expect that energy supply ratio disclosure will become a new standard for the banking sector,” he added.
However, the comptroller’s office also expressed concern about the banks’ persistent high levels of fossil fuel financing, citing a Bloomberg NEF study. It indicated that the ratio of clean energy to fossil fuel financing must increase to 4:1 by 2030, contrasting with the 2022 average of 0.6:1 for North American banks.
Shareholder resolutions are still in place at Bank of America, Goldman Sachs and Morgan Stanley, and the pension funds have said they would continue engagement with these banks.
“We call on Bank of America, Goldman Sachs and Morgan Stanley to follow suit at a time when our planet and investment portfolios are at risk,” Lander said.
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A New York state appeals court ruled on Thursday that former ViacomCBS investors can proceed with a lawsuit against Goldman Sachs, Morgan Stanley and other banks involved in the underwriting of two stock offerings for the media company.
The decision comes one week after a federal judge dismissed seven lawsuits filed by the investors accusing Goldman Sachs and Morgan Stanley of misconduct contributing to the March 2021 collapse of Archegos Capital Management.
The lawsuit alleges that the banks concealed their role as counterparties in total return swaps for Archegos, leading to massive stock dumps in March 2021 when Archegos faced margin calls and collapsed.
While the banks argued that they had already implemented measures to prevent conflicts of interest and insider trading, the appeal court maintained that the banks had a duty to disclose transactions that could impact stock prices.
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US independent investment bank Jefferies has announced that it is set to expand its footprint in Canada through a strengthened partnership with Japan’s Sumitomo Mitsui Banking Corp.
Jefferies and SMBC established their Canadian investment banking unit in December and have been working together on cross-border merger and acquisition deals, healthcare and leveraged finance since 2021.
Last year, SMBC expanded its US presence by combining its US equity and M&A business with Jefferies. In January, the two companies extended their alliance to the Europe, the Middle East and Africa markets.
SMBC’s financial backing has been crucial in this partnership. They provided Jefferies with $2.25bn in financing in 2021 and bought about 4.5 per cent of Jefferies’ common shares. In April 2023, SMBC disclosed plans to boost its ownership in Jefferies to up to 15 per cent, which would result in the Japanese bank becoming its largest shareholder.
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Bank of America is facing a lawsuit alleging it reneged on a promise to refund overdraft fees to customers facing hardship during the Covid-19 pandemic.
US district judge Yvonne Gonzalez Rogers ruled on Wednesday that the customer allegations were plausible, as the bank continued to promise relief from overdraft and insufficient fund fees despite quietly ending its client assistance programme.
The programme, which ran for five months in 2020, pledged to address the pandemic’s impact on 66mn of the bank’s individual and small business customers. Rogers concluded that the claimants “sufficiently pleaded that the defendant advertised a programme when none existed”.
The case comes as US banks face increasing scrutiny from regulators over overdraft and insufficient fund fees. In January, the US Consumer Financial Protection Bureau proposed curbing overdraft fees at large banks, reducing the typical $35 fee to $3, which could save American consumers $3.5bn a year.
Source: thebanker.com
