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Resolution Details

Company:

PNC Financial Services Group, Inc.

Year:

2024

Issue Area:

Environment, Militarism / Violence

Focus Area:

Climate Financing, Human Rights Policy, Military Contracts

Status:

Filed

Resolution Text

RESOLVED Shareholders request the Board of Directors prepare a report, at reasonable cost and omitting proprietary information, explaining how PNC’s risk management systems ensure effective implementation of its Human Rights Statement in existing and proposed general corporate and project financing. The report may include: 

A description of human rights due diligence processes in place to embed respect for human rights into operations and to provide access to remedy for human rights impacts connected to financing relationships; and
Indicators used to assess effectiveness.

WHEREAS: Under the UN Guiding Principles on Business and Human Rights (UNGPs), companies are expected to respect human rights throughout their operations by conducting human rights due diligence to assess, identify, prevent, mitigate, and remediate adverse human rights impacts.[1] PNC is one of the largest banks in the US, with over $556 billion in assets.[2] 

PNC has a practice of financing clients connected to systemic human rights violations, despite its human rights commitments. The Company is exposed to legal and reputational risk if it fails to effectively implement its policies across business activities. For example, PNC was a key financier of Energy Transfer in 2017, which built the widely opposed Dakota Access Pipeline,[3] a project which incurred $7.5 billion in material social costs.[4] PNC additionally increased its fossil fuel financing by 77% between 2021 and 2022, investments which are frequently linked to human rights abuses, particularly in Indigenous, Black, and brown communities.[5] For instance, PNC provided credit facilities to enable the now defunct Atlantic Coast Pipeline, which was abandoned in part due to civil rights concerns.[6] 

Additionally, PNC lends over $2.82 billion to companies producing controversial weapons, including nuclear weapons, white phosphorus, depleted uranium weapons, and incendiary weapons.[7] These are illegal or have prohibited use under international law due to their potentially indiscriminate and disproportionate impacts on civilians.[8] For example, nuclear weapons are designed to cause massive death and destruction, impacting long-term human health, the environment, and socioeconomic development.[9] Major investment institutions are divesting from producers of controversial weapons[10], including over 100 institutions with policies against investments in nuclear weapons.[11]

Although PNC’s Human Rights Statement commits to upholding the UN Universal Declaration of Human Rights, it is not aligned with the UNGPs. PNC’s Environmental and Social Risk Management and Rapid Risk Screen tools lag behind peers in identifying the bank’s most salient human rights risks. Bank of America and Citigroup disclose lists of high-risk social issues and disclose criteria for elevated human rights due diligence.[12] The report we request will enable investors to assess the effectiveness of PNC’s screening tools and questionnaires to mitigate human rights impacts throughout its lending portfolio. 

[1] https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf 

[2] https://www.forbes.com/advisor/banking/largest-banks-in-the-us/ 

[3] https://www.banktrack.org/download/does_your_money_fund_oil_pipelines/mazaskatalksdoesyourmoneyfundoilpipelines3f.pdf 

[4] https://www.colorado.edu/program/fpw/sites/default/files/attached-files/social_cost_and_material_loss_0.pdf 

[5] https://www.ran.org/wp-content/uploads/2022/03/BOCC_2022_vSPREAD-1.pdf ; https://ajph.aphapublications.org/doi/10.2105/AJPH.2023.307403 

[6] https://insideclimatenews.org/news/18052018/atlantic-coast-pipeline-natural-gas-civil-rights-environmental-justice-epa/ ; https://www.nrdc.org/bio/gillian-giannetti/three-lessons-learned-axed-atlantic-coast-pipeline 

[7] https://www.washingtonpost.com/news/checkpoint/wp/2016/09/19/saudi-arabia-appears-to-be-using-u-s-supplied-white-phosphorus-in-its-war-in-yemen/ ; https://www.nytimes.com/2020/02/07/us/trump-land-mines-cluster-munitions.html ; 

https://www.dontbankonthebomb.com/risky-returns/ 

[8] https://www.un.org/disarmament/wmd/nuclear/tpnw/ ; https://www.icrc.org/en/doc/assets/files/other/customary-international-humanitarian-law-i-icrc-eng.pdf 

[9] https://www.icrc.org/en/document/humanitarian-impacts-and-risks-use-nuclear-weapons 

[10] https://www.ai-cio.com/news/norways-klp-divests-from-producers-of-controversial-weapons/ 

[11] https://www.dontbankonthebomb.com/policy-analysis-report-moving-away-from-mass-destruction/ 

[12] ttps://about.bankofamerica.com/content/dam/about/pdfs/MISC-02-23-0371_O_f_ADA.pdf ; https://www.citigroup.com/rcs/citigpa/akpublic/storage/public/Environmental-and-Social-Policy-Framework.pdf h

 

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Resolution Details

Company:

PNC Financial Services Group, Inc.

Year:

2023

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets, Climate Financing

Status:

Filed

Resolution Text

WHEREAS: The Intergovernmental Panel on Climate Change says global greenhouse gas (GHG) emissions must be cut in half by 2030 to achieve net zero by 2050 and meet the Paris Agreement’s goal to limit warming to 1.5 degrees Celcius and avoid the worst impacts of climate change. At current emissions trajectories, an estimated 10 percent of economic global value could be lost by 20501.

Banks play a critical role in limiting global temperature rise and face serious business risks associated with financing projects or companies that lack alignment with the Paris Agreement. Financing high- emitting activities poses systemic risks to the global economy and portfolio-wide risks to investors, not to mention material risks to the bank’s own operations.

PNC Financial Services Group (“PNC”) recognizes numerous physical and transition risks of climate change to their operations in their 2020 TCFD report2. Despite so, PNC has increased fossil fuel lending to $32 billion in 2021 and is currently the seventh largest fossil fuel financier based in the US.3

Investors applaud the Bank’s commitments to address the financed emissions in their portfolio by joining the Partnership for Carbon Accounting Financials (PCAF). However, investors remain concerned that PNC’s delay in setting a net zero commitment with decarbonization targets for its highest-emitting sectors signals lagging climate action.

In contrast, the Bank’s competitors, U.S. Bancorp4 and Truist5, have both announced a goal to achieve net zero greenhouse gas emissions by 2050 and disclose 2030 targets for selected carbon-intensive industries in their portfolio.

RESOLVED: Shareholders request that PNC set near and long-term greenhouse gas emission reduction targets aligned with the Paris Agreement’s ambition to limit warming to 1.5 degrees Celsius. The targets should address the bank’s operational and most climate-critical financed emissions, including those associated with the lending and investment activities for its highest-emitting sectors.

SUPPORTING STATEMENT: In assessing targets, proponents recommend the following, but defer to Board and management discretion:

Disclosure of the Company’s Scope 1 and 2 emissions, as well as the financed emissions noted above (Scope 3);

A commitment to reach net zero GHG emissions by 2050 or sooner;

A near-term (2030 or sooner) target for its highest-emitting sectors, with a commitment to update this target every 5 years; and

Consideration of approaches used by advisory groups such as the Science Based Targets initiative. Emissions from underwriting should be accounted for in the Company’s disclosure and target-setting once methodologies become available.

 

1 https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-natural-catastrophe- risk/expertise-publication-economics-of-climate-change.html
2 https://www.pnc.com/content/dam/pnc- com/pdf/aboutpnc/CorporateResponsibilityReports/PNC_TCFD_Report_2020.pdf
3 https://www.bankingonclimatechaos.org/#data-panel
4 https://www.usbank.com/about-us-bank/company-blog/article-library/us-bank-sets-goal-to-achieve-net-zero- greenhouse-gas-emissions-by-2050.html
5 https://ir.truist.com/2022-01-27-Truist-Announces-Goal-of-Net-Zero-Greenhouse-Gas-Emissions-by-2050

  

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Resolution Details

Company:

PNC Financial Services Group, Inc.

Year:

2023

Issue Area:

Militarism / Violence

Focus Area:

Nuclear Weapons

Status:

Omitted

Resolution Text

RESOLVED: Shareholders request the Board of Directors report on the company’s due diligence process to identify and address environmental and social risks related to financing companies producing controversial weapons and/or with business activities in conflict-affected and high-risk areas.

WHEREAS: Under the UN Guiding Principles on Business and Human Rights, PNC has a responsibility to address adverse human rights impacts that it may cause, contribute to, or be directly linked to its business.1 This applies regardless of the size or scope of those activities.

PNC lends over $2.82 billion to companies producing controversial weapons, including nuclear weapons, white phosphorus, depleted uranium weapons, and incendiary weapons.2 These are illegal or have prohibited use under international law due to their potentially indiscriminate and disproportionate impacts on civilians.3 For example, nuclear weapons are designed to cause massive death and destruction, impacting long-term human health, the environment, and socioeconomic development.4 Major investment institutions are divesting from producers of controversial weapons5 , including over 100 institutions with policies against investments in nuclear weapons.6

An Amnesty International report found that Boeing, General Dynamics, and several other companies PNC finances are failing to meet their human rights responsibilities and have been connected to gross human rights violations, including those that could amount to war crimes.7 For example, Boeing is an integral arms supplier to Saudi Arabia for use in Yemen.8 Gross human rights violations have been committed throughout the conflict, prompting Congress to urge Biden to “halt all arms sales” until civilian harm ceases.9

PNC’s Environmental and Social Risk Management (ESRM) framework, due diligence processes, and screens lag behind peers. The Company does not explicitly address weapons nor identify the defense sector as presenting elevated risk. Other peers like Citigroup have policies against directly financing military equipment like nuclear weapons.10

PNC faces reputational risk if its “sustainable” reputation is undermined by financing activities that fuel the climate crisis and undermine global security. The U.S. Department of Defense (DoD) is the world’s largest greenhouse gas emitter.11 DoD emissions have surpassed the steel industry, of which PNC’s ESRM flags as an elevated risk for environmental due diligence.11 It is unclear why the Company has omitted controversial weapons from this framework. Nuclear weapons development, production, and testing, deemed by UN experts as one of the “cruelest” forms of environmental injustice, continues to have catastrophic impacts on human health and the environment.12 Weapons like white phosphorus have destructive environmental impacts that can perpetuate for years.13

Increasing scrutiny of lending practices escalates reputational risk to PNC as a retail banker. The Stop Banking the Bomb Campaign has held over 100 demonstrations outside of PNC offices, calling for divestment from nuclear weapons manufacturers. Shareholders lack sufficient evidence on how PNC is managing these increasing risks.

 

1 https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf

2 https://www.washingtonpost.com/news/checkpoint/wp/2016/09/19/saudi-arabia-appears-to-be-using-u-s-supplied-whitephosphorus-in-its-war-in-yemen/ ; https://www.nytimes.com/2020/02/07/us/trump-land-mines-cluster-munitions.html ; https://www.dontbankonthebomb.com (Forthcoming Report)

3 https://www.un.org/disarmament/wmd/nuclear/tpnw/ ; https://www.icrc.org/en/doc/assets/files/other/customaryinternational-humanitarian-law-i-icrc-eng.pdf

4 https://www.icrc.org/en/document/humanitarian-impacts-and-risks-use-nuclear-weapons

5 https://www.ai-cio.com/news/norways-klp-divests-from-producers-of-controversial-weapons/

6 https://www.dontbankonthebomb.com/policy-analysis-report-rejecting-risk/

7 https://www.amnesty.org/download/Documents/ACT3008932019ENGLISH.PDF

8 https://complaints.oecdwatch.org/cases/Case_474

9 https://www.nytimes.com/2022/09/07/us/politics/biden-aid-yemen-saudi-arabia.html

10 https://www.citigroup.com/citi/sustainability/data/Environmental-and-Social-Policy-Framework.pdf

11 https://watson.brown.edu/costsofwar/files/cow/imce/papers/Pentagon%20Fuel%20Use%2C%20Climate%20Change%20and% 20the%20Costs%20of%20War%20Revised%20November%202019%20Crawford.pdf

12 https://www.icanw.org/nuclear_tests#:~:text=Even%20those%20that%20have%20been,soil%2C%20air%2C%20and%20water.

13 https://ieeexplore.ieee.org/document/5596102

  

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