“Green Buildings”Wells Fargo’s Commitment to the Environment

By Jessica Melendy, Student

2 May 2013

Abstract: This study seeks to explore how successful Wells Fargo is at carrying out their CSR and Sustainability initiatives. It is particularly interested in Wells Fargo’s “green building” campaign and their Wells Fargo Regional Foundation. In conducting this research, it becomes clear that Wells Fargo is attaining their goals with regard to the construction of LEED buildings; however they are struggling to maintain a positive public image with their Wells Fargo Regional Foundation because of the nature of its exclusivity.

1

Introduction

Wells Fargo’s “green building” campaign has been a very successful CSR and

sustainability program for their organization. The purpose of this campaign is to “lead by

example through [their] own operations. [It] is critically important [for them] to ‘walk the talk’

and do [their] part to help protect our environment” (Wells Fargo, 2013). They are currently in

the process of achieving LEED recognition for all of their retail banking stores, representing

about 6,000 buildings or approximately 30 million square feet. Already, nineteen of their office

buildings meet LEED standards or are ENERGY STAR 2010 rated. Wells Fargo is also a

participant in the U.S. Green Building Council’s LEED for Volume program. Their Duke Energy

Center is the first and tallest office tower to have ever received the highest level of certification

under LEED. They have installed and activated solar panels on 11 banking stores in the Metro

Denver area. Those systems have helped Colorado avoid 296 metric tons of greenhouse gas

emissions. In addition, they have reduced their greenhouse gas emissions by 12%. Wells Fargo’s

“green building” program has made it possible for them to have received a 2011 leadership

award from the U.S. Green Building Council for their commitment to environmentally

responsible building design, construction and operation. By 2020, they hope to have achieved a

40% increase in energy efficiency, a 65% waste diversion rate, a 35% reduction in absolute

greenhouse gas emissions and 35% of their buildings will have achieved LEED certification.

The Wells Fargo Regional Foundation was established in 1998 and aims to help low

income communities in Eastern Pennsylvania, Delaware and New Jersey plan and implement

community building programs. The Foundation has invested hundreds of thousands of dollars

into the revitalization of desperate communities in need. There are seven guiding principles that

Wells Fargo follows when making grantmaking decisions include: compelling, comprehensive,

2

accountable, sustainable, collaborative, replicable and inclusive. If an application meets these

requirements, the board will then make a decision based on how well the applicant has met these

criteria. The Foundation has been under scrutiny, however, because of the fact that Wells Fargo

is a multi-billion dollar corporation but the amount of funds that they are allocating to a

relatively small region in the United States is quite low. This study seeks to explore the ways

with which Wells Fargo executes these CSR and Sustainability initiatives and the overall

outcomes of these endeavors, to date.

Background

Founded in 1852, Wells Fargo is a national bank, with global operations, and is one of

the highest rated banks in the country. Wells Fargo prides itself on being a community-driven

bank, despite its growing size. Headquartered in San Francisco, they service one in three

households while providing over 9,000 banks and 12,000 ATM’s nationwide. They claim to be

devoted to customer service by offering the best online banking experience. According to their

website, they proudly serve 70 million customers in over 130 countries across the globe (Wells

Fargo Website, 2013). Their key stakeholders include: their staff, employees, maintainers,

customers, competitors, investors and the various communities to which they belong.

Wells Fargo’s competencies include their ability to benefit local communities by offering

educational programs, funding neighborhood enrichment projects, small businesses and non-

profits. The execution of their “green building” campaign is a positive way that the organization

has been able to show that sustainability is one of its top priorities. Some of their core

competencies include the fact that they have managed to stay superior and relevant during the

economic crash of 2008 while holding a better credit rating than all of their competitors. The

3

strategy in their vision that “we want to satisfy all our customers’ financial needs and help them

succeed financially” has been quite a prominent feature in their slogan (Wells Fargo Vision,

2013). They fulfill this promise by offering unique loan packages and education tutorials with

their community driven structure.

Wells Fargo has a sufficient following on Twitter, Facebook and successfully uses RSS

feeds. These pages allow their stakeholders the opportunity to voice their opinions and develop

feelings of intimacy with them. Wells Fargo uses these technologies to discuss a variety of

topics. One of their twitter pages is entirely devoted to responding to posts regarding customer

satisfaction or dissatisfaction. They address each client specifically with a promise to follow up.

Their other twitter page offers links to blogs, topical stories and tips on retirement. Wells Fargo’s

Facebook page is not as elaborative as their Twitter page but still allows their stakeholders

access to their newsfeed. Their RSS feeds are more informative and are a helpful ways for

customers to gain knowledge about the corporation. Unfortunately, Wells Fargo is lacking a CSR

blog, an active Pinterest account and has a weak presence on Facebook.

Wells Fargo’s five primary values include: seeing their team members as a competitive

advantage, ethics, doing what’s right for their customers, diversity/inclusion and leadership.

They understand that retaining hardworking, honorable employees is crucial because customers

count on the competency of those in charge. They prefer to call their employees ‘team members’

because of the friendly nature of the term. This also allows them to highlight their investment in

“team work”. They believe that a business should be judged by what they do, not by what they

say. In doing what’s right for their customers, Wells Fargo is able to sustain itself by continuing

to provide a trustworthy banking experience. The focus on diversity and inclusion has also

allowed Wells Fargo to preserve itself as they service more demographics by acting responsibly.

4

Wells Fargo believes in leadership and feels as though it is their obligation to develop and help

the communities with which they serve, while ensuring customer ease by emitting confidence,

responsibility and strength.

Corporate Social Responsibility is a relevant factor because of the “five identifiable

trends” that make it absolutely necessary for an organization to succeed in today’s market,

including: growing affluence, ecological sustainability, globalization, the free flow of

information and brands (Werther & Chandler, 2011). Wells Fargo is aware of these trends and is

focused on trying to keep up for the sake of success. They understand how growing affluence

affects the competitiveness of the financial industry. They strive to earn customer loyalty and

trust by offering programs geared toward educating them on responsible financial spending.

They strive for ecological sustainability by lessening their paper waste and by promoting their

“green building” campaign. They have globalized their company and are now servicing “over

130 countries worldwide” (Wells Fargo Website, 2013). The “free flow” of information is

readily available on their site with links to documents and reports. They are also using their

Twitter feeds as a way to communicate freely with their audience. Wells Fargo has branded itself

by being “a community-based, diversified financial services company.” (Wells Fargo's Who are

We Page, 2013).

There are several different types of arguments for CSR and sustainability and Wells

Fargo realizes this. The moral argument implies that an organization is obligated to “repay the

debt it owes society for its continued business success” (Werther & Chandler, 2011). It is the

organization’s duty to perform at a responsible level that is beneficial to society. This applies to

sustainability because an organization’s understanding of societal responsibilities is directly

correlative with their ability to sustain a business in the environment with which they thrive.

5

Wells Fargo calls itself a community based bank and contributes to neighborhood enhancement

projects. In addition, Wells Fargo’s “green building” operation is crucial in their commitment to

CSR and sustainability on a moral level. The rational argument for CSR suggests that if an

organization fails to act in accordance with societal expectations, they will no longer be able to

sustain themselves and may flounder economically. Wells Fargo continues to devote their energy

to ensure that this does not happen. The economic argument for CSR combines the moral and

rational arguments and concludes that adherence to both arguments is directly related to

economic prosperity and sustainability, as is evident with Wells Fargo’s corporate standing

today.

The five environmental forces propelling a greater interest in CSR include: growing

affluence, ecological sustainability, globalization, communications technologies and brands.

Growing affluence is an environmental force propelling business interest in CSR because most

CSR attentive businesses are located in developed countries. Wells Fargo is a global bank;

however they are headquartered in San Francisco. Wells Fargo is concerned about the

environment as part of their sustainability program because of their moral obligation to society.

They strive to reduce their paper waste. Wells Fargo has a global presence and is using social

media to take advantage of the internet in order to reach target audiences and key demographics.

Findings

Within this discussion of Corporate Social Responsibility and Sustainability I have

researched Wells Fargo in an effort to better understand their approach to sustainability and the

strategy that they have used with regard to CSR. Wells Fargo has a reputation for being one of

the nation’s most reliable, eco-friendly banks. Their “green building” campaign is consistently

6

praised as altruistic and groundbreaking. Yet, Wells Fargo still faces scrutiny over their

foreclosure rate and the fact that their corporate giving is insignificant in comparison with their

net worth.

The Wells Fargo Regional Foundation funds neighborhood projects in low income

communities in the areas of Delaware, New Jersey and Pennsylvania. In doing this, Wells Fargo

is able to support their “community based bank” slogan by essentially rebuilding troubled areas.

However, because Wells Fargo has a net worth of over a trillion dollars and they are only

contributing a minute fraction of that amount to these projects, they have come under attack for

trying to use this initiative as a way to gain positive CSR publicity.

Wells Fargo prides itself on being an advocate for low-income communities. However,

according to Marnie Tisot (2013), “giving a community what [Wells Fargo] thinks it needs

[despite good intentions], [it is] positioning the community as a beneficiary rather than a

stakeholder” (3). The fact that Wells Fargo is only giving up a fraction of their net worth to these

struggling communities, in a relatively small region of the United States, it is appearing as

though the bank is not genuinely interested in the outcome.

Wells Fargo is also making negative press by its foreclosure rate. According to Andrea

Torres (2013), “Wells Fargo Bank wants to foreclose on an old 180-unit low-income rental

community that has been getting government aid for nearly two decades to keep prices low in

Homestead” (p.1). There have been protests across the country at various Wells Fargo locations

because of these foreclosures. Unfortunately, there is not much that Wells Fargo can do about

this because it is essential for a financial institution to ensure that it stays above water and acts

accordingly to unpaid loans.

7

Another initiative that Wells Fargo is invested in is the installment and funding of “green

buildings”. Wells Fargo has taken this campaign very seriously in an effort to help preserve the

environment at all costs. Wells Fargo “announced it will plunk down $30 billion in loans and

investments aimed at building a greener economy” (Kho, 2012). The bank has already “received

a leadership award from the U.S. Green Building Council for its commitment to environmentally

responsible building design, construction and operation.” (The Charlotte Business Journal, 2011,

p.1). By all accounts, Wells Fargo is a pioneer at constructing a greener corporate world one

building at a time.

Wells Fargo is not alone in its effort to conserve the economy. More and more

organizations are interested in “going green”. Nestle is another corporation that is committed to a

greener future. Leon Kaye (2013) writes that “Nestlé has publicly committed for the first time to

make “forward-looking commitments” to social and environmental sustainability.” (p.1). Like

Wells Fargo, Nestle is invested in launching a new CSR/Sustainability campaign. Wells Fargo

and Nestle are both focusing on short-term goals that are tangible and easily attained. Like Wells

Fargo, they are investing millions of dollars in responsible environmental tutorage, as far as

consumption and production are concerned. They also have an established timeline, like Wells

Fargo, with 2020 as the year that they hope to have achieved their goals. Among their many

initiatives, they are going to be reducing greenhouse emissions by 35%.

Another environmental investment that Wells Fargo is committed to is a non-profit

organization called Imagine H20. According to a press release distributed by WaterWorld.com

(2013), “Since its inception in 2008, Imagine H2O has: attracted over 200 water startups from

more than 15 countries to its competition program, provided over $1 million of in-kind services

and cash awards to more than 25 new businesses, helped its portfolio companies attract over $15

8

million in investment from angel investors, venture capital funds and project finance funds and

offered campus water entrepreneurship workshops to over 1,000 students” (p.1). Wells Fargo has

been a supporter of this organization since 2009.

Strengths Wells Fargo is effectively producing

Green Buildings and reducing their

carbon footprint through Ecological

Sustainability.

Wells Fargo is still one of the

nation’s most reliable banks.

They have shared their CSR report

with stakeholders and have

maintained transparency through a

free flow of information.

They are essentially corporate

activists in the production of LEED

buildings.

Weaknesses

They have come under scrutiny for

the Wells Fargo Regional

Foundation.

Wells Fargo has recently made news

for their increasing number of

foreclosures.

They have a weak Facebook

presence and a lack of fresh social

media dedicated specifically to CSR

and sustainability.

High Foreclosure Rate

Opportunities In continuing to partner with

environmental non-profit

organizations, like ImagineH20,

Wells Fargo can continue to gain

popularity within the eco-friendly

circle.

Wells Fargo needs to dedicate social

media to their sustainability

initiatives because they are doing a

lot more good environmentally.

Threats The increasing number of

foreclosures is diminishing Wells

Fargo’s public image while

strengthening that of their

competitors.

A lack of up to date social media is

corporate suicide.

Unfavorable public perception

because of recent bad press with

regard to the Facebook scandal.

9

They also need to expand their

outreach globally.

Wells Fargo has had little involvement with social activism in the past. In actuality, they

have gone out of their way to remove themselves from as much social turmoil as possible. For

example, they do not have a public relationship with Idle No More and Keysotone XL, which are

two of the major current social issues today. The bank tries to remain silent on these topics

unless they are forced into action. For instance, when activists from Occupy Wall Street desired

a meeting, Wells Fargo graciously allowed them into their offices and heard them out. Dick Price

(2013) reports that “Wells Fargo executives met with six key activists involved in various

Occupy movement forces in Los Angeles. [They] expressed satisfaction that their concerns had

been heard by leaders of the banking giant, but frustration that little concrete action had been

taken and no promises made for future steps.” (p.1). Wells Fargo offered hope that they would

do whatever they could to accommodate the cause, however hardly seemed invested in that

promise. Recently, they had to block several Facebook users from posting on their page in

resistance to home foreclosures happening across the country. Wells Fargo does not have a very

good Facebook page or Twitter account, as far as their CSR and Sustainability efforts are

concerned. Much of their social media presence is informative and self-centered.

In addition to studying the specific corporate social responsibility and sustainability

efforts of this firm, I have also researched what similar firms in this industry are doing in this

area. Like Wells Fargo, FleetBoston is investing in environmentalism. In 2001, it was the first

bank in the world to endorse both the CERES principles and the United Nations Environment

Programme Statement by Financial Institutions as part of its environmental management

10

program. ING has been measuring, tracking and monitoring its performance in the ethical, social

and environmental field since 1995 and is considered to be one of the leading fortune 500

companies. Also, Union Bank pledges to follow "Green" building protocols, like Wells Fargo. In

addition, Bank of America supports green businesses by purchasing energy efficient office

equipment and by financing green organizations.

The findings of this research project hope to shed light on the argument as to whether or

not CSR and sustainability are equally meshed in the company culture. The question of where

CSR falls with regard to public relations and to business practices, and how sustainability

correlates, is also being addressed.

Conclusion

This case study examined Wells Fargo’s sustainability and CSR initiatives, particularly

that of their Green Buildings and the Wells Fargo Regional Foundation. Their Green Buildings

campaign has been very successful with regard to the fact that they received a leadership award

from the U.S. Green Building Council and have already converted 19 of their offices to meet

LEED standards or are ENERGY STAR 2010 rated. Their future goals are achievable and

altruistic. However, The Wells Fargo Regional Foundation is facing scrutiny because of the fact

that they are only contributing a minute fraction of their finances on the limited communities that

they are serving. What does this mean for the Wells Fargo Regional Foundation? Should they

incorporate a broader region into their focus? Wells Fargo needs to expand their level of

outreach while simultaneous elevating their budget if they want to truly make a difference and

not seem as though the project is simply for show. Are their Green Buildings enough to keep

their public perception positive? It will only benefit Wells Fargo to continue to pursue this

11

campaign with the mindset of truly making a difference on the environment, as future studies

will be able to better illustrate.

References

Charlotte Business Journal. (2011, October 7). “Wells Fargo earns Green Building Council’s leadership award”. Charlotte Business Journal. Retrieved April 9, 2013 from http://www.bizjournals.com/charlotte/news/2011/10/07/wells-fargo-earns-green-building.html

Guevarra, L. (2011, September 26). “Wells Fargo, Bloomberg, Malkin Named Green Building Leaders”. GreenBiz.com. Retrieved Aril 10, 2013 from http://www.greenbiz.com/news/2011/09/26/wells-fargo-malkin-bloomberg-named-green-building-leaders

Kho, J. (2012, April 23). “Wells Fargo to invest $30B in environmental financing”. GreenBiz.com. Retrieved April 9, 2013 from

12

http://www.greenbiz.com/blog/2012/04/23/wells-fargo-commits-30b-sustainability-investments

Price, D. (2012). “Wells Fargo Meets Occupy: Where There’s Smoke There’s Smoke?”. LA Progressive. Retrieved April 9, 2013 from http://www.laprogressive.com/wells-fargo-meets-occupy/

Tisot, M. (2013, February 11). “Community relations: much more than CSR”. Quiblo. Retrieved March 27, 2013 from http://professionalservicesolutions.net/blog/view/1631/community_relations__much_more_than_csr

Torres, A. (2013, April 9). “Wells Fargo Bank wants to foreclose on Homestead affordable-housing complex”. The Miami Herald. Retrieved April 8, 2013 from http://www.miamiherald.com/2013/04/09/3332496/bank-wants-to-foreclose-on-homestead.html

TriplePundit. (2013, March 17). Nestlé Promises More Shared Value on Nutrition, Water & Rural Development. http://ow.ly/iRtK2 (Twitter post). Retrieved from https://twitter.com/triplepundit/status/313780626933284864

Water World.com. (2013, February 28) “Wells Fargo invests in leading water innovation accelerator, Imagine H2O”. Waterworld.com. Retrieved April 9, 2013 from http://www.waterworld.com/articles/2013/02/wells-fargo-invests-in-leading-water-innovation-accelerator--ima.html

Wells Fargo Website “https://www.wellsfargo.com/”

Werther, W. & Chandler, D. (2011). Strategic Corporate Social Responsibility. Washington DC: Sage.

13