Money is the oxygen of every business on the planet. Reduce the supply of money to a business, and it simply cannot breathe. It dies.
Millions of schoolchildren, university students, working people, and elders demonstrated on the last two Fridays, demanding that their politicians take immediate action to pass laws that will save our planet. In a world led by Trumps, Putins, Bolsanaros, and people like them, political action seems nearly impossible. The way we are going it might not happen by 2030 or even 2050.
But there is hope and a way around the politicians. If we can choke off the money flowing as investments and insurance to the fossil fuel industry, it will wither, struggle and, eventually, die. And we will have a cooler, cleaner world to live in.
Political leaders make some of the decisions that affect our lives, but those who control the money also have enormous power, and they can make decisions in a matter of months or even days, not years or decades. Perhaps the key to disrupting the flow of carbon into our atmosphere lies in disrupting the flow of money to coal plants, oil wells, pipelines and gas plants.
This is not a new idea. In 2012, the climate activist organization, 350.org, helped launch a global movement to persuade managers of pension funds, university endowment funds and other large pots of money to sell their stock in fossil-fuel companies. It has become the largest such campaign in history: funds worth more than eleven trillion dollars have divested some or all of their fossil-fuel holdings.
And it has been effective: when Peabody Energy, the largest American coal company, filed for bankruptcy, in 2016, it cited divestment as one of the pressures weighing on its business, and, this year, Shell called divestment a “material adverse effect” on its performance.
But what if we could convince the banks to stop financing the fossil fuel industry? Lee Wasserman, a director of the Rockefeller Family Fund, says that it’s time to take on the reputations of the bankers, in much the same way that the Sackler family has increasingly been shunned for its role in the opioid crisis. Bankers around the world know that enabling the expansion of a deadly fossil-fuel industry is sure to cause the death and suffering of millions of people, including their own grandchildren. Yet their machine of finance keeps cranking along. If we could just convince these captains of finance to stop investing in bad stuff, perhaps we can save the planet.
Some activists have begun to envision a campaign to pressure the banks and insurance companies to change where they invest the money that we lend to them in our checking accounts, savings accounts, and term deposits. Around the world, the retail business is a massive part of the business of banks.
One of the significant risk factors going forward for these guys is generational. They have a growing group of consumers and potential employees who care a lot about climate. These young people are going to be choosing who they do business with based on their bank’s commitment to a liveable planet.
According to a recent article in the New Yorker by Bill McKibben, a few of the big European banks have begun taking steps away from fossil fuels already. In June, the French giant Crédit Agricole announced that it would no longer do business with companies that are expanding their coal operations. By 2021, its coal-business clients in the developed world would have to produce a plan for getting out of the business by 2030; its clients in China by 2040; and its clients everywhere else by 2050.
BankTrack, an NGO headquartered in the Netherlands, called the announcement a “welcome first step,” and, indeed, the restrictions have clearly begun to bite. In late June, an Indonesian power-company executive said, “European banks have said they don’t want to finance coal projects for a while. Japan followed, and now Singapore.
About eighty-five percent of the market now don’t want to finance coal-power plants.” He added, “Coal-power-plant financing is very challenging.”
Like it or not, financial giants are the masters of our planet. Money does control the world. If we can get bankers and the rest of the financial industry to put the lives of their children and grandchildren before the financial returns of their shareholders, we might just have a chance to avoid the climate catastrophe that we are, otherwise, heading for.