BREAKING NEWS: a leading UK bank has suddenly seen the light and will stop funding coal-fired power stations and end its broader support for oil, gas, and coal companies with immediate effect. The bank, which shall remain nameless, will also pay damages to communities that were hit hardest by coal projects that were (co)funded by the bank.
Does this sound too good to be true? Sadly, it is. This press release was published last week by the student movement Fridays for Future (FFF), as part of a spoof campaign for which the action group, made up of secondary school, college and university students, pretended to be the UK bank in question. This included setting up a fake website, a fake Twitter account for the CEO and a staged live press conference. During the press conference, where the bank was supposedly going to announce the details of its new policy, an introduction by the ‘management board’ of the bank was followed by the appearance on stage of a couple of young female FFF-representatives in corporate outfits, including fake moustaches.
The students thus confronted the bank in a painfully obvious manner with the huge discrepancy between its policy and its empty promises: campaign slogans such as “Here for Good” and “Good enough will never change the world” as well as commercials full of cute rabbits and flying whales are not compatible with its position asEurope’s biggest financier of coal-fired power station developers. On top of that, the recent changes in its funding policy for the fossil industry will not start to have any real effect until 2027.
Unfortunately, this UK bank is no exception. Worldwide, a host of banks, insurance companies and pension funds have promised that they will assume responsibility, sometimes explicitly promising that they will reduce their funding to the fossil industry. Their responsibility is huge because he who pays the piper calls the tune. Ethically aware banks, insurance companies and pension funds should therefore set requirements for the companies to which they provide loans or insurance policies or that they invest in.
But there are limits to what financial institutions can achieve. The institutions themselves know this only too well: according to a recent survey only 17% of the biggest institutional investors actually believe that oil companies will manage to transform themselves into greener companies. This is not exactly in keeping with the often-heard argument by financial institutions that they continue to support such companies so as to be able to exert positive influence on a company’s policies. Because why would you remain involved if you are convinced that your efforts will not have any impact?
Sometimes it is better to stop funding altogether. If banks, insurance companies and pension funds would actually do this, the most polluting companies would be forced to become sustainable more quickly in order to remain eligible for the funding that they need. If they fail to do this and do not survive, that would also not be a disaster from an environmental point of view. So far, such a large-scale movement among financial institutions has unfortunately remained elusive: since the Paris Climate Agreement was signed in 2015, the 60 biggest banks in the world have provided a massive amount of USD 3.8 trillion to the fossil industry. Dutch pension funds, too, still have no qualms about investing your money in large fossil companies. Green campaign slogans, slick sustainability websites and lots of song and dance about policy changes are therefore often nothing more than carefully applied and very real looking fake moustaches.
Of course, in Europe for instance, the authorities are trying to undo the effects of this disguise via laws and regulations, including by requiring more transparency. That should make it easier for you and me to distinguish between financial institutions that are keeping up appearances and those that really want to make a difference. However necessary and welcome, this is unfortunately going to be a long-drawn-out process. That is why actions that expose hypocrisy, such as that of FFF, are and will remain crucial. And a reminder for financial institutions: eventually even the best fake moustaches will fall off.
This is a translation of Joeri de Wilde's column on RTL Nieuws, published May 22nd, 2021.
Also read Joeri's previous column 'Urgently required: a sense of urgency'.