Shareholders press Credit Suisse on scandals, stronger climate action

Updated with correction.

Norges Bank Investment Management is not part of the group of investors backing a climate resolution calling for Credit Suisse to disclose its activities and strategy for reducing exposure to fossil fuels in alignment with its Paris Agreement goals. An earlier version of the story that ran in the April 25 P&I Daily incorrectly included NBIM in the group.

Norges Bank Investment Management is backing shareholder efforts to hold Credit Suisse's board and executives legally accountable in relation to the Greensill Capital and Archegos Capital Management scandals, and to push for an independent audit.

NBIM manages the 11.66 trillion Norwegian kroner ($1.3 trillion) Government Pension Fund Global, Oslo, Norway's sovereign wealth fund.

In a posting of its voting intentions for Credit Suisse's annual meeting this Friday, NBIM said "shareholders should have the right to seek changes to the board when it does not act in their best interest." NBIM will also "take into considerations unsatisfactory financial and strategic performance, mismanaged risk-taking, unacceptable treatment of stakeholders or undesired environmental or social outcomes from company operations," it said.

A call to Credit Suisse spokesmen was not immediately returned. In a letter to shareholders in advance of the virtual general meeting, Credit Suisse Chairman Axel P. Lehmann said a fundamental transformation will take time to implement, but the immediate response to the events of last year led to "a series of decisive steps to reinforce our risk and control framework, strengthen our leadership teams and adjust our risk appetite."

NBIM is also backing a shareholder resolution filed by Ethos Foundation and seven Swiss pension funds calling for an independent auditor to investigate the losses and the bank's decision to freeze investment funds in March 2021. The audit resolution came after Credit Suisse decided to not publish an investigation report, Ethos CEO Vincent Kaufmann said in a statement. "We believe that shareholders are entitled to know the main conclusions of this investigation as well as the measures that have been or will be taken to prevent such cases to repeat in the future," Mr. Kaufmann said.

A growing group of investors is backing a climate resolution at the meeting for Credit Suisse to more aggressively reduce its fossil fuel holdings.

"Whilst investors welcomed the publication of Credit Suisse's updated climate policy at the end of March, concerns remained that its new commitments failed to cover the bulk of the bank's financing and exposure to high carbon assets," according to a statement from responsible investment advocacy group ShareAction and Ethos Foundation, the original coordinators of the resolution. It is now backed by many other investors, including the £55 billion ($70.6 billion) Border to Coast Pensions Partnership, Leeds, England.

"Given the systemic risk posed by climate change, it's essential that businesses such as Credit Suisse take swift action to ensure they are part of the solution," said Jane Firth, head of responsible investment at Border to Coast Pensions Partnership, in an emailed statement. "By supporting this shareholder resolution, we hope to see Credit Suisse take tangible steps to ensure its disclosures and targets cover all capital market activity, ensuring it is on a timeline consistent with the Paris Agreement."