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Environmental and Social Risk Management Framework

Helping clients, and our company, manage complex non-financial matters

As a provider of financial services for customers in nearly every sector of the economy and around the world, Wells Fargo believes that we must consider the environmental, social, and human rights impacts of our lending and investments along with the traditional financial risk – particularly for industries and activities with inherently heightened social and environmental risks. Our commitment to environmental and social risk management supports our companywide goal to be a leader in corporate citizenship and continue to build trust with our many stakeholders.

Our Environmental and Social Risk Management (ESRM) framework and policies build on our due diligence requirements, and they help us identify, evaluate, and manage the environmental and social risks associated with our lending and investments. We update our ESRM requirements as our understanding of these complex issues evolves, and we seek to adhere to global best practices with regard to managing environmental and social risk.

Overarching issues and focus areas

While our ESRM policies are designed to assess and manage any heightened social and/or environmental risk that may be present in our lending and investment, there are a number of overarching issues that have emerged over the years as priority areas for us, and for which best practices in ESRM continue to develop. Climate change, for example, is an issue where regulations, technologies, and best practices in managing carbon risk are constantly evolving, as are stakeholder concerns. Indigenous peoples’ rights and stakeholder engagement are additional overarching issues that drive ESRM policy and practice.

Learn more about the Overarching Issues and Focus Areas (PDF) of our ESRM work.      

Companywide policy restrictions and prohibitions

Wells Fargo maintains internal policies that stipulate companywide and line-of-business-specific prohibited and restricted activities, as well as activities that require additional or elevated approvals prior to providing financing for a transaction. Our policies also completely prohibit credit and other services to certain industries. A partial list of the activities we will not fund or provide other banking services to includes forced and/or child labor, mountain top removal in the mining industry, internet gambling, and “card-not-present” arms sales.

Learn more about our Companywide Policy Restrictions and Prohibitions (PDF).

Our approach to Environmental and Social Risk Management

We believe that by identifying and assessing the environmental and social impacts of our customers, we get a better understanding of their operations and long-term strengths. Our ESRM due diligence evaluates our customers’ commitment, capacity, and track record in managing environmental and social risks and impacts, helping us make better credit and business decisions. Our objective is to ensure that the financial services we provide do not facilitate unacceptable impacts on communities, especially the more vulnerable ones, or on the environment.

We’re committed to following industry best practices for managing environmental and social risk. Our ESRM Policy is aligned with global industry standards and we are constantly evaluating which international practices are most relevant for Wells Fargo in the future.

Learn more about Our Approach to ESRM (PDF).

Critical industries and activities

Wells Fargo provides financial services to a number of customers in industries with heightened environmental and social risk including energy and power, oil and gas, mining, agriculture and forestry, arms and armaments, and consumer finance. Activities in each of these sectors represent unique environmental and social risks, and Wells Fargo’s ESRM policies and framework specify our approach to managing those risks. For example, when considering transactions for regulated corporate utility borrowers engaged in the production, generation, transmission, and distribution of electricity, and/or the transmission and distribution of natural gas, we apply a robust carbon tool that accounts for general portfolio emissions, percentage of coal generation, and risk factors such as state-level demand risk, social cost of carbon, governance, and multi-level regulatory risks. And for oil and gas clients operating in oil sands, we seek to understand their respective approaches to community engagement (including indigenous peoples), land reclamation, tailing ponds, and waste management specific to oil sands.

Learn more about Companywide Critical Industries and Activities (PDF).

Environmental, Social and Governance risk in Asset Management

Wells Fargo Asset Management (WFAM) manages more than $500 billion on behalf of institutional clients and intermediaries worldwide. Recognizing that we are investing in a rapidly changing world, WFAM integrates material Environmental, Social and Governance (ESG) considerations across its business to gain additional insight and drive better investment outcomes.

We appreciate and understand that incorporating ESG can help align investment strategies with client values and deliver investment outcomes that meet a client’s unique requirements.

Learn more about ESG Risk in Asset Management (PDF).

The Private Bank social impact investing

The Wells Fargo Private Bank Social Impact Investing team believes that companies who demonstrate skillful management of stakeholders (including employees, suppliers, customers, shareholders, and debtholders) will build longer-lasting, less volatile businesses, and that companies with poor stakeholder management may see negative impacts to firm value over time.

The team takes a responsible investment approach to all of its investment strategies, focusing on material ESG issues that are most likely to impact a company’s financial situation, aligning with clients’ values through exclusions, and advocating for change at portfolio companies to achieve impact on issues of concern.

Learn more about The Private Bank Social Impact Investing (PDF).

Download the full ESRM Framework

Read the full Wells Fargo Environmental and Social Risk Management Framework to learn more about how we assess and manage environmental and social risk in our lending and investments to better serve our clients and our communities.

Download the Environmental and Social Risk Management Framework (PDF)