Originally published in November 2012
An alliance of over 200 financial institutions, including the insurance and pensions giant Aviva and the astoundingly unethical conglomerate HSBC, controlling a combined £13 trillion of assets, has called on governments around the world to take more action to prevent climate change. The firms warn that natural disasters such as Hurricane Sandy (which they point out caused $50 billion worth of damage) are only going to become more regular with advancing climate change, and say that this represents a major threat to the global economy.
And this means that “the banks are right”. Excuse me for a minute while I marvel at the oxymoronic nature of that sentence. However, I am sceptical as to how far-sighted these financial institutions really are: as a general rule, commercial money only sees 10 or at most 20 years into the future. I don’t see investment bankers flocking out of their ivory towers in the Square Mile to join Greenpeace in donning sandals and attending demonstrations whilst munching tofu.
But seriously, there are two points to be made here. Firstly, these corporations are demanding state action to slash carbon emissions, and whilst it’s all very well adopting such rhetoric, I’d question the extent to which the financial sector is willing to pull its finger out and contribute towards the cost of these green measures. If a government increased corporation tax (or the top income tax band) to help fund any of this, they’d be the first to threaten relocation to Switzerland or Dubai.
That said, it is well known that the FTSE 100 collectively own the political leadership of most Western governments, so this unholy alliance of big business and lefty environmentalists (and I am proud to be a member of the latter group) could be just the right combination to force the world to act. With so much to do in the space of 40 years, we need all the support we can get.
My second point is that it is interesting to note that the organisations at the center of the “free” market machine, which lobby for savage tax cuts and, by extension, a much smaller state, seem to view governments, not the markets, as the organisations responsible for preventing environmental disaster. They’re against state intervention unless the state is subsiding a lucrative new green sector of the economy. Ahem (“cherypicking”)!
I suggest we call their bluff and introduce legislation forcing investment firms to sell holdings in oil, gas, air travel and mining companies, in favour of direct loans to renewable energy and other green projects.
Sounds fair, doesn’t it?
