Morgan Stanley's Shareholders Vote to Continue Financing Fossil Fuel Projects
(Reuters) — Shareholders in Morgan Stanley voted on Thursday against a proposal aiming to stop lending to new fossil fuel projects, in line with the bank's board of directors orientation.
Environment non-profit foundation Sierra Club proposed the bank adopted a policy by the end of this year committing to proactive measures to cease financing new fossil fuel development.
A preliminary report of the voting showed only 8.3% of shareholders were in favor of the proposal.
Morgan Stanley's directors said in a document released in April that if it ceased funding fossil fuel projects, other players would still provide it. "The transition to a low-carbon economy is complex, and requires intentional balancing of risks and opportunities," they said, calling the proposal a "one size fit all approach."
The directors added the bank is committed to reduce financing coal-fired power generation, thermal coal mining and new oil and gas projects in the Artic.
"I think we're frankly behaving very responsibly in helping this world and the world's economies transition to cleaner sources of energy without enforcing abrupt changes that would be so disruptive and damaging in other areas," CEO James Gorman said in the meeting, when responding to a question about funding liquefied natural gas projects.
Proposals to curb fossil fuel financing have received weak support for initiatives in other U.S. banks, such as JPMorgan Chase & Co., Bank of America, Citigroup and Wells Fargo.
When answering a shareholder question about the likelihood of a U.S. recession, Gorman said he believes it is still below 50%. "I've said publicly I thought it was probably around 30%, or maybe a little higher than that now," he added.
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