Seattle, a notoriously progressive city, is no stranger to big business. Seattle residents share their hometown with companies such as Microsoft, Amazon, Costco, and, of course, Starbucks. It makes sense, then, that the Seattle community would be concerned as employees, investors, and neighbors with the ethical practices of big businesses—so much so that on February 7th, Seattle’s city council voted to end its 18-year relationship with Wells Fargo.
The ruling comes in response to Wells Fargo’s loan of $120 million to the construction of the controversial Dakota Access Pipeline, as well as other ethically questionable practices. The banking giant manages over $3 billion of Seattle’s operating account, all of which will be divested when the city’s contract ends next year. The council also voted to stop making new investments with Wells Fargo for the next three years.
This isn’t the first Wells Fargo controversy with which Seattle has taken issue. This past fall, news broke of millions of fraudulent accounts that had been opened in order to make sales goals, sparking Seattle’s October decision to end negotiations on a $100 million bond for electrical utility. The ruling by the council included a $185 million fine against Wells Fargo for this misconduct. Seattle isn’t alone, either—Illinois and California also put a hold on some relationships with the San Francisco-based bank following the account controversy, and the Davis, CA council voted unanimously this month to divest from it due to its involvement with the pipeline. Additionally, individual clients and environmentalists have withheld their business and organized demonstrations outside Wells Fargo locations nationwide.
In spite of these scandals, Wells Fargo claims that it is committed to responsible energy and Native American issues. According to its website, Wells Fargo has loaned $2 billion to Native American tribes, including the Standing Rock Sioux Tribe, the community that would be most directly impacted by the potentially detrimental consequences of the pipeline. The website also states that Wells Fargo partially or fully owns 10% of all US solar and wind energy projects and has invested $70 billion in green businesses in recent years. However, the page also states that the bank has financed “traditional energy projects” over the last 40 years.
Still, Wells Fargo insists that it is unable to disqualify lending applicants based on the industry or political views of the business represented. This means that it has found itself in the middle of a conflict between two of its constituents—the owners of the pipeline, and the Standing Rock Sioux Tribe. Wells Fargo needs to consider, however, that its constituents are not its only stakeholders. Climate change affects everyone, as do the environmental implications of large businesses’ decisions. And if more large cities like Seattle or Native American tribes follow in the footsteps of the council’s ruling, the bank could stand to lose a lot more than $3 billion.
Original story: http://www.cnbc.com/2017/02/08/seattle-to-cut-ties-with-wells-fargo-over-dakota-access-oil-pipeline.html CNBC, February 8, 2017
Wells Fargo statistics: https://stories.wf.com/wells-fargos-involvement-funding-dakota-access-pipeline/
Cover image: https://i1.wp.com/www.nationofchange.org/wp-content/uploads/2016/12/c89a57d9aa.jpg?fit=720%2C477