Wells Fargo will pay $1 billion in fines for violating federal rules and unfairly charging consumers inappropriate fees as part of its mortgage lending operation, according to a settlement the company reached with federal regulators.
Meanwhile, the San Francisco-based bank said Thursday that it plans to put $200 billion toward investment in, and finance of, companies and projects involved with clean technologies, renewable energy, green bonds and alternative transportation, by 2030.
Several Wells Fargo rivals also have made substantial commitments to finance projects aimed at accelerating the transition to a low-carbon economy. In July, JPMorgan Chase pledged to facilitate at least $200 billion in clean financing by 2025, and back in November 2015, Goldman Sachs promised $150 billion for clean energy projects by 2025, which extended a previous pledge of $40 billion. Citi is deploying $100 billion.
To date, Wells Fargo has invested $6 billion in solar and wind farms across the United States, and it recently tripled its investment, to $30 million, in an incubator for clean-technology startups that it runs with the National Renewable Energy Lab.
Among its renewable energy investments, Wells Fargo financed and recently identified itself as a co-owner of a 150-megawatt solar farm in Texas, with NRG Yield. The plant, which is under construction, will sell its power to the town of Georgetown, Texas, under a long-term contract.
The bank is likely to do more deals such as this, as well as expand its footprint in green bonds, green-building underwriting and other environmentally sustainable sectors of the economy, said Mary Wenzel, the company’s head of sustainability and environmental affairs.
“We looked at where we think the markets are going, where we currently have participation in different components of sustainable finance, and tried to be ambitious,” Wenzel said, during a phone call with journalists. “We want this commitment to be that, plus how are we going to stretch and be ambitious as a company? We looked across our businesses to where we can have a focus, enhance our focus and have an impact as a company.”
“We looked at where we think the markets are going and tried to be ambitious”.
Meanwhile, the bank said it has limited its exposure to companies involved in coal mining and mountaintop removal, and has rigorous requirements for companies and projects in industries such as oil and gas, and electricity generation that have higher social and environmental risks than other business sectors.Wells Fargo has created a rigorous due diligence process for identifying these risks, and on the flip side, identifying benefits for investing in, or providing financing for, innovative technologies and best practices, Wenzel said.
In the future, the bank plans to provide more detailed information to investors and the public about its sustainability-focused investments and financial activities. The new format will appear in reports that will be forthcoming after the bank’s upcoming corporate social responsibility report, which the company said it plans to release soon.