Wells Fargo: A follower in the climate transition

Unremarkable commitments, overly optimistic social media and marketing, and increasing fossil fuel financing in recent years position this bank as a follower in the climate transition.

By Ellie Kim Fromboluti

December 6, 2022

bright red and yellow Wells Fargo ATMs

Big banks have poured $4.6 trillion into fossil fuels since the Paris Agreement was enacted in 2016. Imagine what those dollars could do if they were put to work supporting climate change mitigation, rather than bankrolling environmental destruction.


Next on our list of top US banks funding global warming, we discuss Wells Fargo – the fourth largest US bank and the third largest financier of fossil fuels in the world.

Wells Fargo - third largest financier of fossil fuels in the world

Wells Fargo is the fourth largest US bank with $1.95 trillion in total assets, according to its 2021 annual report. It is also one of the top financiers of fossil fuels in the world, with $272 billion in fossil fuel funding between 2016 and 2021, third in line after JPMorgan and Citi

Bar chart of Wells Fargo total fossil fuel financing by year

However, Wells Fargo is vying for second place in the “fossil fool” game. In 2021, its fossil fuel financing was $46 billion, 26% greater than in 2016. Between 2017 and 2021, as much as 22% of Wells Fargo’s fossil fuel financing activity focused on fracking.


Recent increases in fossil fuel funding and overdue net zero commitments call the credibility of this bank’s pledges into question.

Lead funder of fracked oil and gas

Hydraulic fracturing, or fracking, is a method of extracting oil and gas from the earth by pumping high-pressure fluid into rock to create fractures that allow natural gas to escape. The product of fracking is sometimes called shale gas or shale oil. Globally, the US is the top producer of fracked oil and gas. Although tapping US natural gas resources has enabled a degree of energy independence, fracking has significant negative consequences, such as contaminating groundwater, triggering earthquakes, and releasing particles and gasses into the atmosphere that harm the health of nearby communities and the environment.

Fracking equipment in Pulaski, PA

Wells Fargo has provided a total of $47.8 billion in funding to fracking companies and fracked oil and gas pipeline companies since 2016, second only to JPMorgan. According to one report by Oil Change International and Rainforest Action Network, this number is even greater. Analyzing lending and underwriting activity for a specific set of top fracking companies, Wells Fargo is estimated to have facilitated as much as $49 billion in fracking funds between 2016 and 2020.

Cloudy Mountain River winding through Appalachian forest and mountains, Coopers Rock State Park

Let’s drill deeper into a project special to Wells Fargo, the Mountain Valley Pipeline, or MVP. The MVP is a pipeline proposed to carry shale gas over 300 miles from northwestern West Virginia to southern Virginia. When completed, it’s estimated that the MVP will output at least 112 million metric tons of greenhouse gas (GHG) pollution, equivalent to nearly 24 million passenger vehicles. Residents along the project’s over-300-mile extent oppose the MVP because of its negative impacts on the groundwater, farmland, and local community.


Yet Wells Fargo is currently and has for some time been a top funder of the MVP, along with JPMorgan and Bank of America. In fact, Wells Fargo “plays a pivotal role as lead arranger” of credit for EQT Midstream Partners (EQM), the entity with the largest ownership stake in the project (47%). Despite encountering numerous delays pushing the projected completion date of the MVP back years and costs that have doubled from $3 to $6 billion, major banks continue to supply EQM with ample funding.


The real kicker? The MVP is economically unsupported. It’s simply not needed – there is neither the gas nor the demand to require the pipeline. It poses unnecessary financial and climate risks and is basically a methane-leaking money hole.

However you slice it, Wells Fargo has increased its fracking funding in recent years. In 2021 alone, Wells Fargo provided $8.5 billion in financing to fracking companies, surpassing even JPMorgan. Meanwhile, the bank touts its recent investment of $10 billion in renewables as an achievement, though this amount is far less than its overall $46.2 billion investment in fossil fuels in 2021.

Finally some commitments to climate change

In March 2021, Wells Fargo announced its commitment to net zero by 2050, a late player to the game. Despite its sluggish response to climate change, in its 2020 Task Force on Climate-Related Financial Disclosures (TCFD) Report (released February 2021), CEO Charles Scharf says that “climate change is one of the most urgent environmental and social issues of our time.”


Wells Fargo’s net zero plan includes interim targets to reduce absolute emissions in the oil and gas sector by 26% and to reduce emissions intensity in the power sector by 60% by 2030 (relative to a 2019 baseline). Its plan also includes a pledge of $500 billion by 2030 to sustainability initiatives and steps to incorporate climate risk management into its decision processes.

Sunset behind power line truss towers

At present, the bank does not disclose Scope 3, Category 15 emissions (i.e., financed emissions). However, acknowledging that financed emissions are a large component of its carbon footprint, Wells Fargo’s net zero plan also includes plans to “disclose its approach to measure Scope 3 financed emissions within a year.” 


In October 2021, Wells Fargo joined the Net Zero Banking Alliance (NZBA). In theory, this ties them to interim emissions commitments and annual progress updates – but we’ve mentioned previously that being a member of the NZBA is not an automatic good. NZBA banks continue to fund fossil fuels. Making the apparent commitment to net zero without action to back it up runs the risk of greenwashing.

Evaluating Wells Fargo

Here are three points to consider in evaluating whether Wells Fargo is taking substantive steps to counter climate change.

(1) Absolute emissions targets for the oil and gas sector

Wells Fargo – like Citi – is unique amongst the major US banks in setting absolute emissions targets for the oil and gas sector for 2030. However, a major weakness regarding its 2030 emission targets is that those targets include only upstream (i.e., exploration and production) and downstream (i.e., refining), but not midstream (e.g., pipeline) emissions. Wells Fargo is the top funder of the companies building projects such as the Mountain Valley Pipeline (see MVP Case Study). Such financing would not be excluded under this policy.

Factories shooting smoke into the sky

It’s also worth noting that Wells Fargo has set less stringent targets for its Power portfolio, which includes only emissions intensity targets and reports only Scope 1 emissions. 


On a positive note, at present, the bank does not include carbon offsets in its targets (though it leaves open the possibility of including these in the future). Companies at times use carbon offsets to justify increasing emissions instead of using them as a last resort in a net zero strategy. Additionally, according to a recent Sierra Club report, carbon offsets are problematic because the effectiveness of many carbon removal technologies is untested.

(2) Weak coal policy

Wells Fargo has one of the weakest policies towards coal amongst top US banks.

black coal deposits view from above

Although it has committed to excluding project financing in this sector, its policy is vague, and still permits corporate financing, which is a major source of funding that enables continued fossil fuel expansion. The bank makes few specific commitments regarding funding for coal mining companies and coal power companies, though it has claimed “that it currently does not directly or indirectly provide new financing or is in the process of exiting existing relationships or reducing exposure as contracts expire, for the coal industry.”

(3) Shareholder discontent

Two shareholder resolutions addressing social and environmental issues related to climate change at the 2022 notice of annual meeting and proxy statement suggest the bank is not doing enough to address the climate.

Item 8 proposed by shareholders called out Wells Fargo for providing $3.86 billion in financing for the Enbridge Line 3 tar sands pipeline expansion, which infringes on Indigenous rights and poses great risk to the environment. A 2020 report estimates that the proposed expansion to the Line 3 project will add 193 million tons of CO2e to the current Line 3 emissions, bringing the new Line 3 total emissions to 273.5 million tons of CO2e each year. That’s equivalent to nearly 59 million additional vehicles on the road or 73 new coal-fired power plants.

59 million additional vehicles on the road equals carbon emissions from Line 3 pipeline expansion

Item 9 proposed by shareholders specifically challenged Wells Fargo’s climate policy, requesting the bank stop funding new fossil fuel development (filing by sierra club). The bank claims that it is already doing enough by setting out its net zero by 2050 policy, which includes aims to set concrete targets by the end of 2022. Bank management claims, further, that they “are not proceeding down this path alone” – remarking that their response to the energy transition is typical for other big banks.

The verdict: leaders in fracking, followers in the climate transition

grey shale rock with moss

Altogether, Wells Fargo’s response to the climate transition positions them as followers, not leaders. 


As is typical for other banks of its size, Wells Fargo is guilty of greenwashing in its social media and promotional content. For example, an April 2022 Instagram post recommends that people “be a part of the change because the risk of inaction is too great to ignore,” which seems a bit ironic coming from the last major US bank to set net zero commitments.

Sierra Club responded to Wells Fargo’s tardy commitments saying:

“There’s no time left for banks to ponder how to start addressing the biggest and most obvious drivers of the climate crisis.”

This seems especially pertinent to Wells Fargo, whose commitments in some cases are merely plans to make plans, which it has yet to disclose as of November 2022.


Wells Fargo continues to be a top funder of fossil fuels – specifically of midstream fossil fuel expansion, with no solid commitments to reduce its activity in that realm. This is particularly concerning since it has increased funding in recent years – at present, Wells Fargo has found loopholes that enable it to continue profiting from fossil fuels while simultaneously setting targets and presenting a green image.


If you have a Wells Fargo account, demand more – or consider alternative banks. In line with the International Energy Agency (IEA) call for a freeze on all fossil fuel projects, demand concrete policies on ending funding for fossil fuel expansion. Wells Fargo needs to reverse the trend in funding and reduce rather than increase fossil fuel funding.

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