Biggest US banks targeted by environmental groupPublished by MAC on 2004-03-15
Biggest US banks targeted by environmental group
Planet Ark (Reuters), story by Jonathan Stempel
March 15, 2004
New York- An environmental group on Thursday demanded that 10 big U.S. financial institutions stiffen their lending standards for project financing, after successfully pressuring Citigroup Inc. to take action.
The Rainforest Action Network has sent letters calling on the companies to phase out funding for the oil, gas, mining, and logging industries in endangered ecosystems; reduce funding for greenhouse gas producing industries, and work more closely with local populations, among other things. The demands may affect billions of dollars of loans a year.
The companies include eight of the nine largest U.S. banks: J.P. Morgan Chase & Co. (JPM.N: Quote, Profile, Research) ; Bank of America Corp. (BAC.N: Quote, Profile, Research) ; Wachovia Corp. (WB.N: Quote, Profile, Research) ; Wells Fargo & Co. (WFC.N: Quote, Profile, Research) ; Bank One Corp. (ONE.N: Quote, Profile, Research) ; FleetBoston Financial Corp. (FBF.N: Quote, Profile, Research) ; U.S. Bancorp (USB.N: Quote, Profile, Research) ; and SunTrust Banks Inc. (STI.N: Quote, Profile, Research) . They also include Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) and John Hancock Financial Services Inc. (JHF.N: Quote, Profile, Research)
Rainforest, which is based in San Francisco, wants the companies to adopt by April 22, which is Earth Day, standards that meet or exceed those of Citigroup, the largest bank.
"Long-term investments in ecological and social sustainability is the only path to ensure the future health of the global economy," said Ilyse Hogue, a Rainforest director, in an interview. "The bulk of our financial institutions are behind the global curve in confronting these challenges."
After years of criticism from Rainforest, Citigroup in January agreed not to finance projects in "critical natural habitats" unless borrowers show they "will not significantly degrade or convert the critical natural habitat."
It also agreed not to finance commercial logging operations or logging equipment to be used in rain forests, and to protect areas that might suffer ecological damage from development.
Citigroup's guidelines are tighter than the "Equator Principles" drafted by International Finance Corp., the World Bank's private-sector arm.
Hogue said her group met unsuccessfully with J.P. Morgan on the matter, and may place advertising if talks with others were to fail. Its 2003 ads criticizing Citigroup included TV ads featuring actors Ed Asner and Susan Sarandon, among others.
J.P. Morgan spokesman Tom Johnson said his bank is "actively working" on its environmental policies. "We certainly understand their interests and concerns," he said.
Bank One spokesman Tom Kelly, Goldman Sachs spokesman Peter Rose, and SunTrust spokesman Barry Koling said their banks are studying Rainforest's demands. The other companies were not available for comment or did not return calls.
J.P. Morgan is buying Bank One. Bank of America is buying Fleet. Canadian insurer Manulife Financial Corp. Research) is buying John Hancock.