Wells Fargo & Co. unveiled new targets to reduce greenhouse gas emissions, including goals to reduce the "absolute emissions" related to its financing of companies in the oil and gas sector, an executive said May 5.

Wells is the latest big U.S. bank to set targets to reduce the emissions it finances through lending, in line with the United Nations-convened Net Zero Banking Alliance. 

The bank's interim targets aim to reduce absolute emissions by companies it lends to in the oil and gas sector by 26% by 2030 from 2019 levels, and to reduce portfolio "emissions intensity" - a measure of emissions relative to output - in the power sector by 60% during the same period.

The details, which follow similar targets from rival bank Citigroup Inc., move the bank toward an overall goal of achieving net zero greenhouse gas emissions by 2050.

The bank's goal to reduce oil and gas emissions across scopes 1, 2 and 3 is based on projections that incorporate planned reductions in emissions by companies and consumer adoption of electrical vehicles.

Direct and indirect greenhouse gas emissions are known as Scope 1 and 2 emissions, while emissions generated by suppliers and partners are referred to as Scope 3 emissions, and are considered much more challenging to track and reduce. 

"We felt with the oil and gas sector the absolute measure would be the appropriate path to take," said Nathan Lebioda, head of Wells Fargo's treasury strategic programs.

In January, Citigroup Inc C.N said it aims for emissions from companies across its energy loan portfolio to drop 29% by 2030. Other banks have focused on cutting clients' "emissions intensity," a method that climate activists say does not go far enough. 

Climate activists have calculated Wells Fargo provided $272 billion in fossil fuel backing from 2016 to 2021, third largest among global banks. Some critics said Wells' goals conflict with its support for fossil fuel expansion.

"Any target that doesn't check that box won't pass muster with activists or investors," said Alison Kirsch, research and policy manager at Rainforest Action Network, in a statement.

Others gave Wells Fargo higher marks.

"These targets include a strong methodology that extends beyond lending to include capital markets activity," Dan Saccardi, program director at the Ceres Company Network, said by e-mail.