2030 Sectoral Targets and Transition Planning

Resolution Text

Managing Climate Risk Through Greenhouse Gas (GHG) Targets and Transition Planning

WHEREAS: The Intergovernmental Panel on Climate Change says global GHG emissions must be cut in half by 2030 to achieve net zero emissions by 2050, meet the Paris Agreement’s goal to limit warming to 1.5 degrees Celsius, and avoid the worst impacts of climate change. At current emissions trajectories, an estimated 10 percent of global economic value could be lost by 2050.[1]

Banks play a critical role in limiting global temperature rise, and may face serious business risks associated with financing projects or companies lacking alignment with the Paris Agreement’s goals.[2] Financing high-emitting activities poses systemic risks to the global economy, portfolio-wide risks to diversified investors, and serious risks to banks’ own operations (e.g., stranded assets).

While Truist has set 2030 targets for operational emissions, those targets do not include financed emissions. CDP has found that reported financed emissions are on average over 750 times larger than reported operational emissions for financial institutions.[3] So any bank targets that do not include financed emissions are not meaningful.

In its 10-K, Truist recognizes the physical and transition risks associated with climate change that may negatively impact its business, operations, reputation, and clients.[4] The bank also views climate risk as a transverse risk, “meaning it can be a driver of risk across all…primary risk types.”[5] Yet recent reporting has shown the bank is continuing to increase its fossil fuel financing.[6] 

Truist currently ranks first out of the sixty biggest banks globally in terms of its fossil fuel financing as a percentage of its assets. Truist’s financing of fossil fuels reached $14.2 billion in 2023, with a total of $105.3 billion between 2016-2023.[7]

Conversely, competitors have taken risk mitigation steps. For example, Truist’s self-identified peers, including JPMorgan Chase, Bank of America and Wells Fargo, have set 2030 targets to reduce their financed emissions associated with high-emitting sectors like energy and power generation, adding credibility to their 2050 net zero commitments.[8]

RESOLVED: Shareholders request that Truist set and disclose near-term GHG reduction targets aligned with the Paris Agreement’s ambition to limit warming to 1.5 degrees Celsius and summarize plans to achieve them. The targets should address the bank’s most climate-critical financed emissions, including those associated with lending and investment activities for businesses in the highest emitting sectors.

SUPPORTING STATEMENT: In assessing targets, proponents recommend, at Board and management discretion: 

Developing a transition plan that describes how the company will meet both its near-term targets and its previously announced 2050 net zero commitment;[9] 
Considering target-setting approaches used by advisory groups such as the Science Based Targets initiative and transition plan guidance published by the Glasgow Financial Alliance for Net Zero and the Transition Plan Taskforce. 
Accounting for facilitated emissions (e.g., from underwriting) in the Company’s disclosure and target-setting methodologies become available. [10]

[1] https://www.ipcc.ch/report/ar6/wg3/ 

[2] https://www.ceres.org/resources/reports/measuring-and-addressing-climate-risk-banks 

[3] https://www.cdp.net/en/research/global-reports/financial-services-disclosure-report-2022 

[4] https://www.sec.gov/ix?doc=/Archives/edgar/data/92230/000009223024000010/tfc-20231231.htm 

[5] https://www.truist.com/content/dam/truist-bank/us/en/documents/disclosures/non-lob/truist-2023-corporate-responsibility.pdf 

[6] https://www.bloomberg.com/news/articles/2024-09-10/bankers-doing-oil-deals-others-won-t-are-redrawing-an-old-map 

[7] https://www.bankingonclimatechaos.org/wp-content/uploads/2024/07/BOCC_2024_vF3.pdf 

[8] https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/documents/Climate-Report-2023.pdf (p.27); https://about.bankofamerica.com/content/dam/about/report-center/esg/2024/Sustainability_at_Bank_of_America_2024_Report.pdf (p.19); https://www08.wellsfargomedia.com/assets/pdf/about/corporate-responsibility/climate-disclosure.pdf (p.50-52)

[9] https://ir.truist.com/2022-01-27-Truist-Announces-Goal-of-Net-Zero-Greenhouse-Gas-Emissions-by-2050 

[10] https://carbonaccountingfinancials.com/files/PCAF-PartB-Facilitated-Emissions-Standard-Dec2023.pdf (p.26)