As so many of us are dipping into our savings funds during this pandemic, it’s worth considering what the banks normally do with this money that we entrust to them. Disappointingly, it appears that a significant proportion of it has always been invested in projects that contribute directly to climate change.
In fact, last year an alliance of NGOs, including the Rainforest Action Network and Sierra Club, reported that 33 global banks had invested $1.9 trillion (€1.7 trillion) in fossil fuels since the Paris Agreement was adopted in 2016.
Your savings and pensions may be funding Arctic drilling, tar sands oil extraction, ultra-deep-water mining or the construction of new coal power plants. The report featured no Irish banks, although Ulster bank is part of Royal Bank of Scotland, which appeared alongside Barclays, HSBC and Standard Chartered.
Pollute
The reality, though, is that all Irish banks would have money invested in funds linked to the extraction and production of fossil fuels. It’s ironic that the money we set aside for our future security is actually being used to undermine that future. The more we save, the more money banks have to re-invest in carbon-intensive industries to further pollute the planet.
This intertwining of global financial systems does provide us with a potential advantage, in that at a macro level the fossil fuel firms rely on the same financial institutions that we do for banking, asset management and insurance. It’s their Achilles’ heel, according to 350.org, an international environmental organisation focused on achieving a just transition to 100 per cent renewable energy through grassroots activism.
They claim that by pressurising our local banks, pension providers and insurers to cut ties with the fossil fuel industry, we can make it harder for them to get funding and insurance for oil rigs, coal plants, fossil fuel exploration and fracking-infrastructure.
So, should we be protesting at the doors of Irish banks? All have become more aware of sustainability in recent years, with AIB first to flaunt its green credentials by establishing a €5 billion climate action fund, investing in wind energy projects, and creating a lower green mortgage rate for eco-houses. It was also one of the founding signatories of the UN Principles for Responsible Banking. But, as its website says, “It’s still not enough.”
AIB alongside Bank of Ireland and the other principle Irish banks are heavily invested in the fossil fuel industry, but all are gradually beginning to divest their portfolios, because funding cleaner technology can deliver higher returns and lower risks. No one wants to be seen supporting an industry that will cause future death.
The first thing we must do is to ask our banks to clarify whether the money we entrust to them is being invested in fracking, oil tar, shale gas, etc. And to ask the same of our pension/mortgage providers and insurers.
Unfortunately, there’s no sustainable bank in Ireland to switch to, such as Britain’s Co-operative Bank, which pledges not to provide banking services to any business involved in the extraction or production of fossil fuels (oil, coal, gas and shale gas), or the Charity Bank, which lists of all its loans, or Triodos, which invests heavily in renewables.
We could attempt to set up a full-service credit union that did not rely on fossil fuels for profits, but a more effective alternative might be to pressurise the high street banks to stop funding the destruction of the world’s ecosystems. Considering our own Government has committed to divesting all public money from fossil fuels by 2023, our banks must follow.