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A Letter from Our CEO

A message from
Charlie Scharf

"Wells Fargo plays an important role in our communities and our country — and this has never been more true than in 2020."
Charles W. Scharf

I cannot help but look back and think how little we understood one year ago of what 2020 would bring for the world, our country, and our company. The devastation caused by COVID-19 on global public health is clear, but we are still struggling to comprehend the full economic and social impact of the virus. Vaccines will hopefully bring to an end the health risks, but there is much to do to enable a full, fair, and equitable economic and social recovery.

Supporting our employees, communities, and customers

I said last year that Wells Fargo plays an important role in our communities and our country — and this has never been more true than in 2020. We believe we have both an obligation to do all we can and are in a position to provide meaningful support to our employees, communities, and customers. That is just what we did throughout this unprecedented year.

We prioritized employee and customer safety while recognizing that we were an essential service and needed to be available to support our customers. We quickly enabled over 200,000 employees to work from home, something we would not have considered possible just weeks before. We kept at least 70% of our branches open while implementing CDC-recommended safety protocols. We expanded digital access and deployed new tools — including new limits for mobile deposits and wires, new digital mortgage deferment tools, and expanded e-signature support — to make access easier and safer for customers.

We extended significant credit to our clients during the height of the crisis. In March alone, our commercial customers utilized over $80 billion of their committed loan facilities. In 2020, we also provided significant accommodations, including deferring payments and waiving fees for 3.6 million consumer and small business customers. We suspended residential property foreclosures, evictions, and involuntary auto repossessions.

We participated in the Paycheck Protection Program (PPP) and funded 194,000 loans totaling over $10.5 billion. (We also are actively participating in the next round of PPP in 2021.) We were proud to help smaller businesses through this program with 61% of our loans being for amounts less than $25,000, 84% of loans going to companies that had fewer than 10 employees, and 90% for businesses with less than $2 million in annual revenue. In addition, 41% of loans went to companies in low-to-moderate income areas or at least 50% minority census tracts.

In addition, in 2020 we voluntarily committed to donate all of our gross processing fees — approximately $420 million — by creating the Open for Business Fund, which provides support to struggling small businesses impacted by COVID-19. Of this commitment, we deployed $85 million in 2020 and will continue to deploy these funds through 2022.

We continued to pay all employees during the crisis, made a cash award to approximately 165,000 employees who make less than $100,000 per year, and made an additional special payment to those working on the front lines as a way of recognizing their unique contributions. We granted eligible employees additional days off so they could arrange for child care and provided financial support for those in need. We made a grant to the WE Care employee relief fund, which is available to employees affected by COVID-19 and who have limited resources.

In addition, we supported our communities beyond these efforts as we directed a total of $475 million in charitable giving (including the $85 million deployed from our Open for Business Fund noted above) to help address food insecurity, small business support, housing stability and other urgent community needs.

We are just one of many companies that provided necessary support — and we will continue to do so as the impact of the pandemic continues. The economic and operational impact of the pandemic on Wells Fargo has been significant and has certainly added to the complexity of our work, but I am proud of what we have done to continue to deliver for our customers, communities, and employees.

Company assessment

When writing this letter last year, I had been at the company for four months and shared my initial assessment of our challenges and opportunities, both of which were significant. I described my early thoughts on the changes that were necessary for Wells Fargo to put the past behind us and capture the significant potential of this great franchise.

One year later, I continue to believe our franchises are world class, are in the sweet spot of providing necessary financial services to consumers and companies of all sizes, and when working together, are even more valuable. But, as I’ve learned more, the extent of the change required has become clearer and is more significant than I initially assessed.

We are addressing this head-on and moving with an extreme sense of urgency to set clear priorities, which include building the proper foundation first and foremost. And we are also changing the culture where necessary, making management changes as needed, instituting new disciplines to set strategy and manage the company, and refining our business mix so we are positioned to invest appropriately going forward.

2020 financial performance

Our financial performance this past year was challenged by both the external operating environment and the necessary work to put our substantial legacy issues behind us.

In terms of the significant drivers, we built large loan loss reserves to prepare for the economic impact caused by the pandemic. Low interest rates negatively impacted our net interest income, and we were limited in our ability to offset this given our constraints of operating under an asset cap. We recognized restructuring charges to accelerate our efficiency initiatives (more on this later), and we continued to spend significant amounts to build out our risk and control infrastructure as well as to provide remediation for customers to address our historical shortcomings. And while it was absolutely the right thing to do, COVID-19 increased our expenses and reduced revenue as we took actions to support our customers and protect our employees.

Wells Fargo generated $3.3 billion in net income, or 41 cents per diluted common share. Our revenue declined 15% from the previous year, while noninterest expense declined 1%, but remained at an elevated level largely due to customer remediation accruals and restructuring charges. Provision expense for credit losses increased $11.4 billion with large reserve builds in the first half of 2020 reflecting forecasted credit deterioration due to the COVID-19 pandemic.

Loans outstanding declined 8% in 2020, as both commercial and consumer customers adopted a more cautious stance and our commercial clients were able to access the capital markets. Deposits grew $81.8 billion, or 6%, from a year ago as declines in commercial deposits driven by our efforts to remain under the asset cap were more than offset by growth in consumer deposits helped by strong fiscal stimulus, reduced customer spend, and utilization of deferral programs.

"In addition, we supported our communities beyond these efforts as we directed a total of $475 million in charitable giving to help address food insecurity, small business support, housing stability and other urgent community needs."

While we built significantly higher loan loss reserves, actual charge-offs were much lower than anticipated, aided by government stimulus programs and deferral programs that are helping customers navigate the challenges of the pandemic. Our net charge-off rate increased modestly in 2020 — to 0.35% of average loans — but the ultimate timing and magnitude of losses will depend on the broader recovery.

Despite the challenging environment, the strength of our balance sheet was evident throughout the year. Our capital and liquidity levels remained well above regulatory minimums (Common Equity Tier 1 of 11.6% vs. 9% minimum and Liquidity Coverage Ratio of 133% vs. 100% minimum at year-end) and the results of the two Federal Reserve stress tests confirmed our strong capital position. Given the economic uncertainty and the temporary restrictions imposed by the Federal Reserve Bank, we took appropriate measures to maintain strong capital. We suspended share repurchases starting in March, and made the difficult decision to reduce our common stock dividend from 51 cents per share to 10 cents per share. That said, we have significant excess capital, and as the economic recovery becomes clearer and restrictions on capital distributions are lifted, we expect to be able to return capital to shareholders through a combination of higher dividends and share buybacks. Returning capital to shareholders over time remains a priority.

Business and strategic review

We have conducted rigorous reviews of our businesses with an eye towards assessing their strategic fit to the company, assessing the risk/return profile, and creating a roadmap for improved operational and financial performance. Our goal is to be the preeminent provider of financial services in the U.S. and in doing so seek to reward all stakeholders, including investors, employees, customers, and the communities where we do business.

We believe our model as an integrated U.S. bank with significant scale and breadth of capabilities positions us to achieve our goal, and that we are one of only a few that have this position — though we do compete with thousands. Our strategy is about becoming even crisper about serving our target market and taking actions necessary to leverage our strong competitive position.

"Our goal is to be the preeminent provider of financial services in the U.S. and in doing so seek to reward all stakeholders, including investors, employees, customers, and the communities where we do business."


We are clear on who we are. We target U.S. consumers and businesses of all sizes. We do have capabilities outside of the U.S. but these activities are built predominantly to support our core U.S. customers with their global needs or are in domains where we have the scale and expertise to compete locally. We provide the same services for both consumers and companies of all sizes — though the words we use to describe what we do are sometimes different. We are a trusted advisor and provide core banking services including deposits, capital (private and public access to debt and equity), payments, and investments. Our scale and sophistication allows us to have a differentiated presence and technology platform few can compete with.

I firmly believe we have the right businesses at Wells Fargo today to achieve our goal. Our individual businesses are strong and valuable. We have excellent individual franchises that compare favorably to competitors large and small. We have the products, services, people, and scale to be a leader in each, and each business has opportunities to serve customers more broadly and improve its own financial profile. I’ll briefly explain why I feel we are well positioned in each of our four operating segments.

Consumer Banking and Lending provides necessary financial products to consumers and small businesses, including deposits, loans, payments, and investments. The quality and scale of our branches and digital capabilities are matched by few. We serve approximately 65 million customers across our businesses and believe our bank branch footprint will continue to be a competitive advantage. We have bank branches in 25 of the largest 30 markets in the U.S. and 27 of the 30 fastest growing markets in the country.  A Wells Fargo branch or ATM is within two miles of over half of the U.S. census households and small businesses in our footprint.

"I firmly believe we have the right businesses at Wells Fargo today to achieve our goal."


Our physical presence will continue to be an important asset but digital capabilities will become an ever more important complement in our business model, and our scale gives us an efficient platform to spend what is necessary, attract the necessary talent, and partner with third parties. Our margins should benefit as more activities migrate to our digital platforms.

We also have meaningful opportunities to improve margins as we rationalize our real estate footprint, become more efficient in our branch staffing, and reduce our support costs.

Wealth and Investment Management provides us with unique breadth and scale to serve the ever more complicated needs of investors. We have one of the largest and most complete platforms in the industry with over 13,500 advisors who serve 2.8 million customers, all with access to the Wells Fargo Investment Institute’s capabilities. We believe that the need for professional investment and planning advice will grow in importance as broad-based economic advancement continues in this country.

We expect our margins to increase as we combine three different platforms into one supported by a common set of capabilities. We have significant opportunities to provide banking solutions, both lending and deposits, to this customer base, and our independent broker (FiNet) and registered investment advisor (RIA) channels and digital platforms provide meaningful opportunities for growth.

Commercial Banking serves private, family-owned, and small-midsize public companies with core deposit, lending, and payments solutions. We have a leading and enviable franchise, and our strong local relationships that have been built over decades complement our branch footprint. Our scale is a big advantage. Our approximately 5,800 bankers serve nearly 480,000 clients. We serve 46 of the largest 50 markets in the country. Our local teams benefit greatly from the resources and support of our national footprint.

We also have significant opportunities to expand our leading franchise by deepening our client relationships and delivering more of the full enterprise. We have the opportunity to offer more integrated treasury management and payment services, and to partner more closely with our Corporate and Investment Bank to deliver a broader set of solutions, like advice and access to capital markets, to our larger middle market customers. Our margins and client experience should also benefit meaningfully as we optimize our coverage model and continue investing in our digital service offerings.

"Our local teams benefit greatly from the resources and support of our national footprint."


Corporate and Investment Banking has been a core part of the company for many years. The banks that came together to form Wells Fargo served a wide range of customers, from consumers and small businesses to mid-market corporates and larger local corporates. Our traditional banking products — deposits, loans, and payments — formed the basis for most of these relationships. As our corporate clients grew, their banking needs expanded and they wanted access not only to bank capital but also capital through public markets. Our investment banking and trading capabilities are built around satisfying this need and given our status as a trusted partner, we have also earned the right to be a strategic advisor.
We have been disciplined and will remain disciplined in where we compete, but we have the opportunity to grow our business — not by changing our risk profile, but by leveraging our core relationships and delivering the entire enterprise to these clients.

Working together as One Wells Fargo

While our businesses are strong individually, they are even more powerful when working together. Though we talk about separate lines of business, we operate as one company in our communities. Our branches serve consumers and small businesses as well as commercial banking and corporate clients. Our ability to support our local communities is based not only on that breadth locally, but also on the support and the resources of Wells Fargo nationally.

"Though we talk about separate lines of business, we operate as one company in our communities."


At times, our lines of business have served as artificial boundaries for us delivering the very best for our customers and clients. We are breaking down those barriers to more effectively serve our customers which should add to our profitability and returns as well. We have opportunities across our entire franchise — but just a few examples include:

  • Serving different consumer segments with deposit, lending, investment, and service capabilities built around their specific needs
  • Offering integrated payments and treasury services solutions to our clients
  • Providing investment banking and markets solutions to our large Commercial Banking client base

As part of our strategic review, we identified certain businesses that aren’t core to our mission as outlined above. In the past few months, we have announced sales of or our intention to exit the student loan business, international wealth management, and direct equipment finance in Canada. We are also in the process of exploring options for Asset Management, Corporate Trust, and our rail portfolio. We are focusing our efforts on our core, scaled businesses, and these other activities, which may be good businesses, are not consistent with our go-forward core strategic priorities.

Significant transformation is necessary

To deliver on the business opportunities, we are changing our operating model at its core. Historically, Wells Fargo has been run in what has been described to me as the “federated” business model. Business leaders had great latitude to operate independently and work together if they saw fit. Some worked together, and some did not. The result was an ineffective control infrastructure, and we did not capture the benefit that our breadth and depth of capabilities should provide for our customers and clients. Operating as one company is a different mindset that describes how we expect our leaders to work today.

Continuing the Work to Build a Strong and Consistent Foundation

Our transformation is dependent on several foundational pillars that we are keenly focused on. In many ways they are about getting the basics right but are truly critical to our success.

1. Risk and Control Culture (and Our Regulatory Agenda)

Building and implementing an effective risk and control framework across the company is an imperative and a core requirement for the management team.

Historically we have built a strong culture and operating discipline around management of most financial risks including credit, market, liquidity, and capital. But we had not done so with the same rigor in our management of non-financial risks. Building out this infrastructure is our top priority, and we are doing this work completely differently from when I arrived at Wells Fargo. We are moving with a sense of extreme urgency to complete the work, though it will take several years to build and implement a holistic set of mature processes. Satisfying our regulators should be a byproduct of both the cultural change necessary as well as accomplishing the specific tasks.

The Operating Committee, both individually and collectively, is closely managing this work now. We now have clarity of responsibility and accountability at multiple levels across the organization and individuals with the appropriate subject matter expertise in place. We have formal processes throughout the company to manage the work that is required, and this all feeds into regular Operating Committee reviews. Any issues requiring management attention are reviewed formally multiple times weekly at regularly scheduled meetings and we review all work streams at least monthly in detail.

We have clear expectations for management involvement and those expectations are now part of how we evaluate performance. We have made it clear that this is a critical part of our culture, and we are dedicating all resources necessary to accomplish this work, and will continue to do so.

Relatedly, we’ve also been moving with increased urgency to put our substantial legacy issues behind us. This includes working through an expansive set of legal and customer remediation matters which are almost entirely tied to our historical issues. In doing this work, we are absolutely committed to treating customers fairly. In 2020, we made significant progress and it is absolutely critical that we get this work done so we can do what is right for customers and move our organization forward.

2. Operational Excellence and Strong Management Team

In the past, we have simply not done what is necessary to put these issues behind us and that is unacceptable. We are clear about our priorities and are focused on consistent, effective, and efficient execution as a core discipline as never before.

New Management Team

Our Operating Committee, the 18-member senior-most group responsible for running the company, is a new management team. Of the 17 other members (in addition to myself), I have hired nine leaders from outside the company, four are in different roles, and four were relatively new (less than two years) to the company when I arrived. Each member has expertise and experience in their area of responsibility and brings a diverse set of skills, backgrounds, tenures, and perspectives to our discussions and decisions.

"We have transformed the management team by elevating strong internal talent while bringing in people with the experience and skills necessary for our success."

Our broader group of senior leaders is also a new team. Nearly half of our top 150 leaders are new to their role from the start of 2020, including over 40 who are new to our organization.

Management Processes

The way we run the company is entirely different from what we’ve done historically. The Operating Committee meets multiple times per week and discusses all important issues across the company. We act as one management team, with committee members bringing their expertise and backgrounds to all discussions. Diversity of views is imperative. I have always believed that with the right people and all of the relevant facts, the right decisions will get made. We now have that in our Operating Committee.

We have introduced monthly business reviews where we review financial and operational performance in a regular, disciplined way. In addition to the core financial results, these reviews include sections on risk and control deliverables, human capital, diversity, strategy, and progress on large projects. We work as a team to ensure we are moving forward in a disciplined way, using all of the facts available to us, and taking a holistic approach to issues across the entire company.

Transparent Financial Reporting

Having the right information to manage the company, and for investors to assess our success, is critical. One of my early observations when I joined the company was that we were not managing the company at the level of granularity necessary. As a result, we made changes to the management structure — most notably having more of our businesses report directly to me.

That change drove us to completely change our internal reporting to provide us with more transparency into our performance and underlying business drivers and give us the information necessary to create plans to improve our performance. This is now how we manage the company, with reporting and reviews conducted at a business level at which decisions are made — a big change from what had been the practice. This reporting is our dashboard necessary to manage the company.

We have also completely changed our external reporting — with the goal of giving investors a clearer understanding of our results, as well as the ability to compare our businesses on a more like-for-like basis to competitors and track our performance as we do internally. What we now disclose is what we are reviewing internally and our strengths and weaknesses should be clearer than ever, but the potential for improvement should also be clear.

3. Customer Centric Culture and Conduct

Doing what is right for customers must be at the center of everything we do, and unfortunately, we too often fell short of this in the past. We have been taking dramatic steps to embed this mindset into all of our decisions, which feeds into all the ways in which we touch customers. This extends from product design and pricing, to our coverage and service models, to how we approach complaints and remediations. And we know it’s all about our actions, not our words.

To that end, while we have more work to do, we are making significant progress. In 2020, we rolled out a new set of company Expectations with "Do What's Right" as one of six core pillars. It sounds simple — but that is the point. These new Expectations are clear and straightforward and guide how we lead ourselves, collaborate with colleagues, and make decisions; they apply to everyone at the company and are directly linked to how we evaluate performance.

I mentioned this before but our approach to remediating our legacy issues begins and ends with treating customers fairly. Over the past year, with many of our new leaders, we have been rigorously working through issue by issue with this mindset.

"Doing what is right for customers must be at the center of everything we do, and unfortunately, we too often fell short of this in the past."


Additionally, we deployed a new customer feedback program (Net Promoter System) and Complaints Management Platform to collect and react to customer feedback and improve the customer experience. We also built our Sales Practices Management and Oversight program, designed to make sales practices monitoring and reporting more robust and consistent across the company. And lastly, we just recently announced the launch of an Office of Consumer Practices, a consumer-focused advisory group that will partner with our businesses on product development, policies, procedures, training and other areas. All of these efforts are designed to keep the customer front and center and embed that perspective into our decision-making. They are also a critical part of strengthening our risk and control infrastructure.

4. Technology and Innovation

As our foundational work progresses, in parallel we are intensely focused on building technology and digital solutions that will power our businesses over the longer term. All of our businesses need to build digital solutions to complement our physical presence. Ultimately, our goal is to transform our business model from one that is reliant on physical presence and interaction, accentuated by technology solutions, to one primarily driven by technology platforms and enhanced by physical distribution and interaction.

The events of 2020 only accelerated and confirmed how critical this ongoing migration will be. What consumers expect is shifting quickly, and the competition — both incumbent and emerging competitors — is greatly increasing. But given the scale of our franchise, the breadth of our products, and the number of ways we touch customers, we are well positioned to build robust technology platforms and deliver differentiated customer experiences.

While we are focusing much of our resources to strengthen our core infrastructure, we are mindful that our competitors, banks and non-banks, are moving quickly and we must as well.

5. Financial Strength

The safety and security of our financial position should be unquestioned, and to that point, our capital and liquidity levels have historically been strong and remain strong. Despite the turmoil of this past year, our capital and liquidity levels remained well in excess of regulatory minimums.

But as I outlined previously, the impact of COVID-19 on our earnings has been substantial. The majority of our business is traditional banking, and when our customers and clients suffer, we do as well. The unemployment rate peaked at 14.8% and still stands at 6.3% as of January 2021. Consumer spend has suffered, small businesses have struggled to survive, and many commercial banking and larger corporate customers have seen substantially reduced business activity. Commercial real estate is suffering from reduced retail store demand, low hotel occupancy, and little demand for office space.

At the same time, the aggressive actions by the Federal Reserve have helped ensure capital markets stability, which has helped enable very strong trading and capital issuance volumes. While our competitors have benefited more than we have from their more significant trading and investment banking businesses, we also recognize that they went into this environment better positioned than us. Simply put, our margins are narrower than is necessary to support appropriate profitability and returns through environments like today, and we need to change this.

"While we are focusing much of our resources to strengthen our core infrastructure, we are mindful that
our competitors, banks and non-banks, are moving quickly and we must as well."

We are taking action, but not all is in our control

Asset Cap – We remain subject to an asset cap as part of our consent order with the Federal Reserve, and we must prioritize balance sheet usage more so than if it were not a limitation. This is a significant constraint, especially given the operating environment in 2020. While there is still significant work to do, I believe we are making progress and we are confident in our ability to complete the work and when the cap is lifted, we will have more latitude to grow our business and increase our returns.

Capital Return Restrictions – We are also temporarily limited in our ability to return capital to shareholders due to special restrictions placed on the largest banks by the Federal Reserve due to the uncertainties around COVID-19. We have approximately $31 billion of excess capital above our regulatory minimum of 9%. As the path to economic recovery becomes clearer and the Federal Reserve eliminates this restriction, we expect to increase our returns by returning that capital through a combination of higher dividends and share buybacks.

COVID Environment and Low Interest Rates – To combat the negative impacts of COVID-19 on the economy, the Federal Reserve has been extremely accommodative, with monetary policy leading to low interest rates and a relatively flat yield curve. For a traditional bank like ours, this has materially affected our net interest income. For example, our net interest income declined approximately $2 billion in the fourth quarter versus the same quarter last year. As the path to recovery becomes evident, we expect interest rates and the slope of the yield curve will increase — both of which should benefit us.

What We Are Doing

The timing of these headwinds abating is not clear, but when they do, our earnings and returns should benefit meaningfully. But we are not waiting to take action for things in our control. Our company is filled with inefficiencies that don’t just inflate our cost base, they make it more complicated to serve our customers and each other. We have a companywide effort to eliminate these inefficiencies with an eye toward improving our operating performance — and the byproduct should be reduced expenses.

We have a portfolio of over 250 initiatives currently in flight that should reduce expenses by over $8 billion over the next three to four years — excluding additional investments we may choose to make in the company. After factoring reinvestments and other areas of growth, we are still targeting net expense reductions each year, but we may incur additional restructuring charges to accomplish this work. And though we are making progress as I outlined earlier, we still have outstanding litigation and regulatory issues that can be unpredictable.

Importantly, this effort will not impact our risk and control buildout, which continues to be our top priority. We have formal checkpoints in place and all initiatives are rigorously reviewed to help ensure there is no impact. There is still significant work to do and we will continue to spend whatever is necessary to get the work done.

We believe we have a clear path to generating a return on tangible common equity of 10% by executing on our efficiency initiatives and optimizing our capital. Beyond that, we believe the ability to grow our balance sheet, moderately higher interest rates, and executing on additional efficiency and growth initiatives present a path to a longer-term return on tangible common equity of around 15%.

Diversity, equity, and inclusion

While I have always believed in the importance of diversity, equity, and inclusion, the calls for racial justice in 2020 reinforced the urgency of working to create a company culture with broad representation in who we are, how we think, and how we make decisions. Having an inclusive environment in which our differences and perspectives are respected and valued is both a business imperative and the right thing to do.

"While I have always believed in the importance of diversity, equity, and inclusion, the calls for racial justice in 2020 reinforced the urgency of working to create a company culture with broad representation in who we are, how we think, and how we make decisions."

In November, we welcomed Kleber Santos as head of Diverse Segments, Representation and Inclusion. Kleber reports to me and sits on our Operating Committee. In this new role, Kleber is responsible for leading efforts to advance all aspects of diversity, equity, and inclusion at our company and in the marketplace, including partnering with line of business CEOs to deliver products and services specifically designed to meet the needs of our diverse customer base. We have a lot of work to do to embed diversity, equity, and inclusion into every facet of our operations, our processes, and our programs. The addition of Kleber and creation of this new group are critical to those efforts. Throughout 2020, we also announced our expanded commitments to diversity, equity, and inclusion. A few highlights are below:

  • We added the concept of equity to our diversity and inclusion efforts in recognition of the systemic and structural challenges in our society that have contributed to disparities that exist today.
  • We are committed to significantly increasing Black leadership over the next five years.
  • Our Operating Committee members will be evaluated on their progress in increasing diverse representation at senior levels, and these evaluations will have a direct impact on year-end compensation decisions.
  • In the U.S., we are requiring a diverse slate of candidates — and a diverse interview team — for most roles with total direct compensation of more than $100,000 per year.
  • We require unconscious bias training for all managers, and are developing anti-racism training, which also will be mandatory for all managers.
  • Wells Fargo made a commitment in March 2020 to invest $50 million in Black-owned Minority Depository Institutions (MDIs). After spending time understanding each MDI’s unique needs and growth strategy, Wells Fargo completed several investments, which we formally announced in the first quarter of 2021.

While these actions are focused predominantly around race and ethnicity, I want to point out that I know we have a broader set of diversity, equity, and inclusion issues and we will continue to tackle those as well. This is an important moment at our company, and we will not let it go by without substantive changes. Just like with solving our risk and regulatory issues, having the conversation is important to raise awareness, but we must have a plan with a clear path to success. We must move with haste to execute on our plans, and know we will be judged based on our outcomes.

"This is an important moment at our company, and we will not let it go by without substantive changes."

Social impact and sustainability

The events of the past year have demonstrated that societal challenges are part of a web of interconnected economic, social, and environmental issues disproportionately impacting the most vulnerable. And as I said at the beginning of this note, given the breadth of what we do and the customers we touch, Wells Fargo plays a critically important role in communities and can meaningfully contribute to the change that is necessary.

In 2020, we launched a new Social Impact and Sustainability strategy designed to make a greater impact in communities by more effectively combining our financial resources and business expertise. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. Through our businesses and the Wells Fargo Foundation, we are using our resources, business expertise, ingenuity, and collaborations with public and private sector organizations to help solve complex problems. A major near-term focus is fostering an inclusive recovery from the COVID-19 pandemic and strengthening communities that have been disproportionately impacted.

"Through our businesses and the Wells Fargo Foundation, we are using our resources, business expertise, ingenuity, and collaborations with public and private sector organizations to help solve complex problems."

In 2020, we also began an effort to be more transparent and comprehensive in non-financial reporting and disclosures. The company moved from a single, annual corporate responsibility report to a suite of disclosures that more completely addresses our approach to environmental, social, and governance (ESG) risks and opportunities, and performance on ESG measures. Wells Fargo’s inaugural Environmental, Social, and Governance Report details how the company is working to create solutions for stronger communities through diversity, equity, and inclusion; economic empowerment; and environmental sustainability. We believe this enhanced transparency will help inform stakeholders as well as increase progress and accountability toward ESG-related goals.

We believe that collective action is needed to transition to a low-carbon economy and minimize the impact on our most vulnerable communities. We have endorsed the Task Force for Climate-Related Financial Disclosures recommendations because we believe it will help us better manage the risks and opportunities associated with climate change, and contribute to sector-wide progress on financing a low-carbon future. Our goal is to support our customers as they also work to transform their businesses for success in a low-carbon economy, and support our communities as they work to adapt to and mitigate the impacts of climate change.

I am also proud to share that Wells Fargo received a rating of “Outstanding” in its most recent Community Reinvestment Act performance evaluation, which covers the years 2012 to 2018. This rating reflects Wells Fargo’s strong performance on the exam’s components and the company’s proven commitment to serving low- to moderate-income communities.

"Our goal is to support our customers as they also work to transform their businesses for success in a low-carbon economy, and support our communities as they work to adapt to and mitigate the impacts of climate change."

Our future

I believe we have an enviable position in financial services and that our businesses working together form a differentiated platform that should benefit all stakeholders — and deliver superior financial performance. This vision has not been realized recently but we see the potential and have a roadmap to achieve it. We are committed to building the necessary foundation for a bank of our size and complexity, we recognize our responsibility to our stakeholders, and we are committed to making substantial changes in how we operate to fully realize what we believe is great potential.

2020 was a challenging year for all, but I’m proud of what Wells Fargo and my 265,000+ partners have done to support our customers, our country, and our communities. We’ve begun a multi-year process of transforming Wells Fargo to fulfill our potential. I want to thank everyone at Wells Fargo for what they have done through extremely difficult circumstances, and I look forward to a better 2021.

Charles W. Scharf
Wells Fargo & Company
February 19, 2021