- New poll shows 80% of public agree it is morally wrong for banks to profit from investments that pollute the environment and 81% hold bank CEOs responsible.
- 80% of people say they do not want banks to use their savings to invest in projects that damage the environment
- As bank profits soar 40%, a new Christian Aid report reveals UK’s big four are profiting from some of the world’s dirtiest coal mines.
The former Archbishop of Canterbury, Rowan Williams, has questioned the morality of British banks profiting from projects which cause climate change and called for them to shift their investments away from fossil fuels.
His comments come on the back of a new ComRes poll that shows 80% of the British public agree that it is morally wrong for banks to profit from investments that pollute the environment. Four in five people (80%) also say they do not want banks to invest their savings in projects that damage the environment, while 77% agree banks should be stopped from doing so.
Last week Barclays announced profit for the year to September of £3.4bn, up 31% compared to last year. Lloyds announced profit for the same period of £4.5bn, up 38%, while RBS announced a profit of £1.3bn for the same period. HSBC reported profits for the year to date of £11.3bn, a rise of 40%.
Dr Williams, who is chair of Christian Aid, said: “This year we have seen extreme weather displacing millions of people in South Asia and bringing death and destruction in the Caribbean and the United States. These communities count the cost in lives lost. But British investors, including banks, continue to count profits from just those fossil fuel investments that contribute to climate chaos.
“The latest surveys make it plain that an overwhelming majority of the British public do not want their savings invested in holdings that damage our global future – and that they expect bank CEOs to take personal responsibility for making sure that their investments are ethically and environmentally responsible.
“Our call today is for the chief executives of our major banks to make clear and time-specific commitments to reducing and ultimately replacing fossil fuel investment, and to shift towards climate solutions. The moral case is clear, and the public increasingly recognise this. The urgency is mounting.”
The ComRes polling also found that:
- 78% agreed that investing in companies which cause dangerous climate change is morally wrong no matter how profitable it is.
- 81% of people felt bank chief executives should take responsibility for ensuring their banks’ investments are not causing environmental damage with over 55s the largest group in support of this at 85%.
These findings coincide with a new report published by the charity Christian Aid, which shows how the UK’s high street banks are profiting from some of the dirtiest fossil fuel projects around the world, while communities in South Asia, the Caribbean and USA are still paying the price for this summer’s extreme weather events.
The report contains case studies from Colombia, East Africa and Indonesia. It reveals that Barclays, HSBC, Lloyds and RBS are all funding the companies behind the Cerrejón coal mine in Colombia, the coal from which generates nearly the equivalent carbon pollution in a year as Colombia’s entire national emissions. This is despite the four banks all committing to deliver the Paris Agreement goals of limiting global warming to well below two degrees. In fact, two years on from Paris, there’s been no substantive change in the banks’ lending policies or actions.
Christian Aid’s report shows that despite the falling costs of renewables and the increasingly promising investment opportunities they provide, the world is still investing over three times more in fossil fuels than renewables. If this trajectory continues the global economy will have ploughed a staggering $23 trillion into fossil fuels by 2050. This would sink the Paris Agreement’s targets and cause untold misery to people around the world who are suffering from the impacts of climate change, with the poorest already bearing the brunt.
According to the International Energy Agency private banks have a key role to play in reversing the needed investment gap and making the shift to renewables. It concludes its 2017 World Energy Investment report by saying:
“Investment in new low-carbon generation needs to increase just to keep pace with growth in electricity demand growth, and there is considerable scope for more clean energy innovation spending by governments and, in particular, the private sector.”
The International Energy Agency recently released a report showing that renewables will give more people in the developing world access to electricity than coal.
In September, the editor of The Banker Magazine, Brian Caplen, warned that banks faced an existential crisis if they kept burying their heads in the sand:
“Under clean-energy scenarios, oil majors become rather less blue-chip to lend to than those engaged in the technologies of the future – for example renewable energy, electric cars and insulation. In these sectors, there are big opportunities with one estimate putting the investment needed to transition to a lower carbon economy at $1000bn each year for the foreseeable future. This figure is not something dreamed up by an idealistically green organisation – it comes from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, chaired by Michael Bloomberg.”
Christiana Figueres, the former General Secretary of the UNFCCC, last month (October 17th) called on banks to invest a ratio of 2:1 in favour of green investments over brown investments to avoid an economic cliff edge. Speaking at a Regional Roundtable on Sustainable Finance in Europe, held by the United Nations Environment Programme Finance Initiative, she said finance needed to do some heavy lifting out of economic self-interest.
The Archbishop of Cape Town, Most Reverend Thabo Makgoba, leads the Province of Southern Africa which recently decided to divest all its fossil fuel investments on climate change grounds. Responding to the Christian Aid report he said: “Climate change is hurting people in the developing world first and worst. In response to this we are divesting from fossil fuels and can no longer profit from pollution. But in Britain UK banks are still propping up coal mines which are driving the climate change we suffer from. This is morally questionable and they have a responsibility to clean up their act.”
A number of other individuals also responded to Christian Aid’s report:
Mark Campanale, founder and executive director of Carbon Tracker: "We are in the throes of a global energy transition. Rapid advances in technology are driving renewables to be cost competitive thereby undermining accepted fossil fuel business models. However, banks are still failing to price in fossil-fuel risks and biasing brown investments over green despite the huge opportunities the latter present."
Hannah McKinnon, Energy Futures & Transitions Director at Oil Change International: “The fossil fuel era is coming to an end. Banks should be looking for every opportunity to shift investments before the ship sinks: along with a worthless portfolio of stranded assets, there will be a massive moral price tag for those that insist on trying to be the last one out. Financing the climate crisis is an inexcusable ethical decision and a reckless financial one, banks too can decide which side of history they want to be on.”
Bevis Watts, Managing Director of Triodos Bank UK, featured as an alternative to the big banks in the report: “Where you spend, save or invest your money is a vote for your values. In that sense, money is actually a very powerful form of democracy. Individuals, institutions and businesses can all choose not to invest in dirty fossil fuels and to support the transition to a low-carbon economy. At Triodos we have backed more than 300 renewable energy projects across Europe over the past 20 years. We have long understood that what we do as a bank with money can have a positive impact on people and the planet. That is why we report our activities in terms of the Sustainable Development Goal and are 100% transparent about who we lend to - only organisations that deliver positive environmental, social or cultural change.”
As part of the Big Shift campaign more than 25,000 contacts have been made with the CEOs of the big four high street banks asking them to move their investments out of fossil fuels. To sign up to the campaign visit www.christianaid.org.uk/bigshift.
Watch Christian Aid's spoof bank TV ad below.
Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document Partnership for Change (www.christianaid.org.uk/images/partnership-for-change-summary.pdf) explains how we set about this task. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org Follow Christian Aid's newswire on Twitter: www.twitter.com/caid_newswire