One night in October 2017, John Harrington was getting ready for bed when his wife heard a violent wind screaming around their house in Napa County, California. Their daughters had just left after coming over for dinner, and they flicked on the television. A local station reported a fire on Atlas Peak where their home was located. Harrington ran out to his deck and saw it: embers were swirling in the air and winds were howling at 60 miles-per-hour. They bundled the dog into one of their cars and drove down the one road that led off the peak. Towers were down, so they didn’t have phone service. Trees had fallen across the road.
A few days later they returned to find their house burned to the ground.
At this year’s annual meeting of Citigroup shareholders, Harrington told his harrowing story, and then called on fellow investors to support a resolution that would force the bank to stop financing fossil fuel projects. Harrington runs a socially responsible investment firm that manages more than $300 million in assets and advocates for corporate responsibility on things like racial equality and climate change. For Harrington, who divested from oil and gas holdings years ago, the loss of his home crystallized how wide the rift still was between financial institutions and everyday people who bear the brunt of climate tragedy. “This is not bullshit,” he said in an interview. “The banks, they make money financing fossil fuels, and it’s just a game to them. They have no idea.”
Shareholder resolutions can be put forward every year by company owners who have held at least $2,000 in company stock for at least three years; they are proposals for how management should run the company. Shareholders vote on the proposals during proxy season, leading up to and during companies’ annual shareholder meetings that are often held in the spring. Such proposals aren’t binding, but traditionally, those that gain a significant percentage of shareholder votes send a strong message to management about how to steer the company. They can influence corporate decisions even if the proposal doesn’t garner majority support.
This kind of corporate activism is increasingly popular tool among investors concerned about how exposed their holdings are to the mounting risks posed by climate change. After seasons of sustained campaigns by organizations like Follow This!, which aims to put pressure on oil and gas companies to invest in renewable energy technologies, 2021 became a watershed year. Multiple shareholder proposals on climate change gained majority support and a more aggressive board takeover bid by an investment fund at ExxonMobil came away with three seats.
This year, a suite of shareholder resolutions was submitted to address one of the catalysts of such expansion: banks …….