In a 2015 speech to investors at Citigroup’s Headquarters in New York, Christiana Figueres said, “Where capital goes over the next fifteen years is going to decide whether we’re actually able to address climate change and what kind of a century we are going to have.” She went on to urge, “What we truly need is to create a ‘surround sound’ where, no matter what sector you turn to, there is a signal saying, ‘Folks, we are moving toward a low-carbon economy. It is irreversible; it is unstoppable. So get on the bandwagon.’ ”
In April 2021, Mark Carney, previously the Governor of the Bank of England, launched the Glasgow Financial Alliance for Net Zero (GFANZ—clearly the worst acronym in the whole alphabet soup of climate groups). Carney persuaded 160 financial organizations representing $70 trillion in assets to use science-based guidelines to reach net zero emissions, including all emission scopes, meeting 2030 interim target setting, and committing to transparent reporting and accounting in line with the UN Race to Zero criteria.
Problem solved, no?
No. First of all, “net zero” does not necessarily mean the end of fossil fuel carbon emissions. I’ll write more about that soon.
But worse, promises to reduce emissions do not equal less carbon going into the air. Since Christiana spoke, the 60 largest banks that finance fossil fuels increased their investments in the companies that are driving climate change from $723 billion in 2016 to $4.6 trillion in 2022. In 2021 alone, the big banks spent $742 billion funding increased extraction of climate killing fuels.
In response, the UN’s Race to Zero set forth targets for phasing out coal, oil and gas in the summer of 2022. Given the essentially unanimous scientific agreement that the burning of fossil fuels is responsible for the climate crisis, this seemed a reasonable policy.
Fossil funders evidently think otherwise. Last month, faced with the prospect that their commitments might actually be enforced, such American banks as JPMorgan, Morgan Stanley and Bank of America threatened to quit GFANZ. Will they? This here wreck ain’t over yet. Will GFANZ survive? It’s not clearAmazing: you pledge to become part of the solution, but the moment someone holds you to your commitment you quit? Perhaps because you were lying all along. Between 2016 and today, JPMorgan invested $382 billion in increasing fossil fuel extraction. Morgan Stanley chipped in $137 billion. And BofA spent $323 billion.
Yes. It’s frustrating.What can you do? First, ask yourself: where’s my money deposited? Are you financing climate disasters?
This is precisely why we created Change Finance: to give you the chance to vote against climate chaos with your dollars. I hope that you will have the courage that the big banks now show that they lack.
I know, it’s hard to pass up rising returns when the invasion of Ukraine by one of the world’s petro-states drove prices of fossil energy soaring. But look in the faces of the people in Florida who just lost everything, and ask yourself if the extra return is something you can live with.
I can’t. My money, such as I have, is in Change Finance. And a few other stocks where I believe the company is committed to be part of the transition to a fossil free world.And I’ll be in Egypt for the upcoming UN Conference of the Parties where these issues will again be debated. You can join me there: Check out: https://events.futureeconomy.forum/egypt-solutions-events for the events before and during COP where we will be presenting real solutions. It’s going to be amazing: dining under the stars at the pyramids, supper in the Palace of Saladin, dialogues on the shores of the sea in Sharm al Sheikh. I know, COP will fail, again. But I hope that our conversations will make a difference.
I hope you will join me in Egypt, and in putting your money where your mouth is.