Investors with $685B in Assets Highlight Risks for Banks with Ties to DAPL

(3BL Media/Justmeans) – The financial crisis of 2008 was marked by an excessive focus on short term profits, aggressive acceptance of higher risks, and an erosion of trust between institutions and consumers. The positive outcome of that crisis has been a growing recognition of values-based investment decision criteria, and an increasing consideration of ESG issues in investment decisions and services offered by financial institutions.

A recent controversial issue that has assumed serious ethical and environmental dimensions is the financing of the Dakota Access Pipeline (DAPL). This pipeline would travel below the Missouri River, the primary drinking water source for the Standing Rock Sioux, a tribe with a population of about 10,000. Although builders of the pipeline insist on the safety of the project, critics point out to its inherent risks.

Now more than 130 investors representing over $685 billion in assets under management have called on banks financing DAPL, including Wells Fargo, Citibank and BNP Paribas, to address the Standing Rock Sioux tribe’s request to re-route the pipeline and avoid their treaty territory.

The investor coalition, led by Boston Common Asset Management, includes Storebrand Asset Management, Calvert Research and Management, CalPERS and the Comptroller of the City of New York. The investors highlight the reputational and financial risks for banks with ties to DAPL and are also concerned about an escalation of unrest in the region and possible contamination of the water supply.

The investor group cites concerns that banks may be implicated in conflict and controversies related to the pipeline and could face long-term brand and reputational damage resulting from consumer boycotts and possible legal liability.

To date, consumers have closed bank accounts worth over $66 million – and are threatening to pull another $2.3 billion – from the banks financing DAPL. The City of Seattle has voted unanimously to sever its ties with Wells Fargo over its involvement with DAPL, potentially divesting $3 billion.

Steven Heim, Managing Director, Boston Common Asset Management, said that the projected route for the pipeline threatens the Tribe’s water supply and sacred sites. As part of its human rights due diligence on investments, Boston Common has long advocated free, prior, informed consent from indigenous communities, in light of the potential harm to their vital assets like their land, water, and air.

Banks engaged by the coalition include Bank of Tokyo-Mitsubishi UFJ, BayernLB, BBVA, BNP Paribas, Citibank, Crédit Agricole, DNB, ICBC (Industrial and Commercial Bank of China), ING, Intesa Sanpaolo, Mizuho Bank, Natixis, Société Générale, SMBC (Sumitomo Mitsui Financial Group), SunTrust Bank, TD Securities (Toronto-Dominion Bank), and Wells Fargo.

Source and Image: Boston Common