Here’s the latest blog from Extinction Rebellion’s Co-founder Gail Bradbrook, with her colleagues Aidan Knox and Toby Gale (first, second and third are here).
The Emperor’s Clothes and Barclays Bank
“Some government and business leaders are saying one thing – but doing another. Simply put, they are lying. And the results will be catastrophic.”
These are the words of the UN secretary general, António Guterres – blunt speaking to accompany the release of the latest report from the Intergovernmental Panel on Climate Change (IPCC) in April. The IPCC report addresses what must be done to cut emissions to keep warming within 1.5C (the threshold designated by the Paris Climate Agreement). It concludes that we are way off track, heading instead for 3C or more and therefore disaster.
There’s a thread I’ve been following through these blogs which is about our refusal to reckon with reality. It’s as if our economics, finance, and politics have taken up residence in some parallel universe where science doesn’t apply. Bill Clinton famously said: “it’s the economy, stupid!”. Actually, it’s nature, stupid. The life support systems of our home planet are breaking down and reaching tipping points of no return. Physics, ecology and Gaia will have the last say.
Two days after the IPCC report the UK government announced an energy security strategy in defiance of its own net zero targets, allowing more drilling for oil and gas in the North Sea, and re-opening the possibility of fracking, while neglecting viable alternatives including insulation and onshore wind power. The determination to have one’s cake and eat it remains the order of the day.
As Antonio Guterres points out, this is a pattern that applies across big corporations as well as government, and in this blog I focus on the banks and, specifically, the example of Barclays. The physical pipelines transporting fossil fuels have been the target of resistance by communities on the front line and also direct sabotage by the courageous Jessica Reznicek and Ruby Montoya. Climate campaigners have also focussed strategically on the money pipelines, the banks, asset managers, insurers, pension companies and so on, that are ensuring the flow of monies to current and new fossil fuel projects.
Last May, the same month that the International Energy Agency declared that in order to reach net zero there must be no investment in new fossil fuel supply, Barclays’ shareholders backed their board by voting down a resolution to set distinct targets in line with the Paris Agreement. A year on, Barclays remains the worst bank financier of fossil fuels in the UK and Europe. In 2021, they financed $19.583 billion into fossil fuels, putting their total since 2016 to $166.7 billion and keeping them as the seventh largest bank financier of fossil fuels in the world. In 2021, Barclays was the biggest financier of both fracked oil and gas and coal power in Europe.
With its 2022 AGM around the corner (and two weeks ahead of the IPCC report) Barclays released their updated climate plan. It’s simply not enough. ShareAction gives its initial review here, but the highlights are that Barclays is leaving loopholes in its coal policies allowing continued financing, has failed to exclude financing for new oil and coal projects, and did not update its oil and gas policy.
There are some signs that Barclays is finally feeling the pressure though. Its financing for fossil fuel has dropped from 2020 and 2016 levels. Activist groups have made financing fossil fuels reputationally damaging, but not nearly far enough. The laws of nature and physics are not asking us to do a bit, when we're ready; they are telling us to do everything necessary, fast.
The resistance to change certainly owes something to the deep, long-standing ties that the banking sector has with destructive industries, including close connections at an individual level. Research by DeSmog shows that 80 percent of board members at the UK’s five biggest banks have affiliations with environmentally damaging companies, and that almost a quarter of the directors currently sitting on the banks’ boards have a current or past connection to the fossil fuel industry.
Barclays has an especially close relationship with BP and Tushar Morzia, for example, is a board member for Barclays and BP. BP received over $560 million in 2020 from Barclays and over $2.4 billion since 2016.
Barclays also has links with the Global Warming Policy Foundation (GWPF) (a climate denial and delay group). The bill it has lobbied most on was the Climate Change Financial Risk Act of 2019, and we can happily assume it wasn’t to make them stop funding BP. Instead, Barclays could use the hundreds of thousands of dollars it uses to lobby against climate action, to lobby for climate action.
As hedge fund manager Sir Chris Hohn puts it: “Any bank making a net zero promise while actively lobbying against necessary climate regulation … is greenwashing.”
Hohn’s statement comes as InfluenceMap, a climate thinktank, found that the world’s 30 largest listed financial institutions are undermining their net zero targets by continuing to fund fossil fuel expansion, and lobbying against attempts to align financial regulation with climate goals.
Our friends at Sharklays have done a debunking of Barclays claims. The models and measurements used within the finance system to risk-assess climate change are narrow, myopic, and constitute their own branch of magical thinking (as noted in my previous blog), but even these concur that the crisis will wipe out GDP growth.
Swiss Re estimated that “By mid-century, the world stands to lose around 10% of total economic value from climate change” (Swiss Re acknowledges that its report does not take into account tipping points); and Philipp Hildebrand, BlackRock’s vice chairman, has said that ignoring the impacts of climate impacts may cost 25% of Global GDP over the next two decades.
I’ve referred before to the importance of investment choices, and of degrowth investing. Yet in our ‘through the looking glass’ world, though the science has been clear for decades, fossil fuel financing continues. The IPCC report finds that investment is about six times lower than necessary to achieve the dramatic and rapid shift to a low-carbon world that’s needed across all sectors of the global economy, from energy and transport to buildings and food. We will either collapse into de-growth, or manage our way there. By failing to go far enough and fast enough, Barclays and its peers, along with governments, are – in real terms – opting for collapse.
Moreover, as Barclays keeps pumping billions into deadly and volatile markets, we’re seeing how fossil fuels are entangled in fearsome geopolitics.
The oil and gas industry has admitted to working the markets to maintain growth of profits for shareholders by causing a global rise in energy prices during a war. Barclays is now using the Ukrainian war as a reason to not make its climate commitments, when withdrawing from oil and gas is exactly what we should be doing now.
Barclays has Quaker origins, and presents itself as a high street bank you can trust; but its record and its actions tell a different story. It is a habitual offender, funding climate breakdown is consistent with its wider past and present behaviour:
- the funding of rainforest destruction; money laundering scandals;
- tax avoidance of £500 million;
- promoting the use of tax havens;
- rate fixing to make a profit and look more secure during the financial crisis;
It’s quite some charge sheet. And it’s why I got to the point where I got up early in the morning and broke the window of my local Barclays branch in protest at the bank’s role in causing and perpetuating the climate and ecological emergency. The purpose then and now is not to give the finance industry a hard time for the sake of it; whether we like it or not we are all part of this problem and we need to be part of the solution together. But I concluded that window-breaking, in the tradition of the Chartists and the Suffragettes, was part of what’s required to shatter the illusions, and push for change. (My trial is adjourned currently).
And it’s why, in solidarity with frontline defenders from around the world, XR’s Money Rebellion is now taking mass action with #DefundClimateChaos to disrupt business as usual at this year’s bank AGMs (Barclays is happening soon), joined by land protectors from #StopTMX and #StopEACOPAGM. You can get involved here and you can also tell Barclays they’re killing the planet, email them with Market Force’s template.
What is most strange and dangerous here is that the fantasy continues with impunity.
This behaviour is normalised and acceptable within and between the institutions who sit at the heart of our modern world. Again, there's a sense of the parallel universe I referred to above. This disconnect from reality and responsibility for the real-world consequences of actions.
Such destruction, on such a scale, tells us that we do not have a healthy society and a functional state and democracy. Fundamentally it’s not about bad people, but a bad system, and culture,
Individual banks and institutions are manifesting a wider dysfunction and disease. I’m mindful of the words of the senior banker I quoted last time: “The vast majority of employees in Barclays Bank have felt things needed to be done and still it was hard for the CEO to take action, because our species has set up systems skewed in the wrong direction.”
What’s going on here? What is this compulsion to do harm? It’s the biggest question demanding a great collective transformation that we must figure out together.
Let me point to the insistence on profit and return on investment as the overriding goal of corporate governance. The science requires wholesale change, but the system we live in is malfunctioning.
We’ve seen a shift from denial to delay but through it all run obfuscation, and – as called out by Antonio Guterres – lies. The greenwash, the emotionally manipulative winks to the public, the efforts to preserve reputation and respectability are becoming further and more evidently detached from the moorings of reality. The emperor clearly has no clothes. I’m wondering when behaviour which is still mainstream will no longer be respectable, and when collectively we begin behaving like we are in the real world.
What is of central importance here is how much longer government and corporations will cling to their position of fantasy, and impunity; and how much longer society, indeed the wider human family, will tolerate this, as, in the words of Churchill before World War Two, we wake up to this “period of consequences.”
What can you do?
- Support the pressure on banks to end financing fossil fuels. We need to let them know they can’t carry on like this. There are tons of ways to do this:
- Joining movements like XR, Money Rebellion, Sunrise, Green New Deal, 350.org…
- Join the incredible shareholder action groups: ShareAction, MarketForces and use your shares as a power for change.
- Tell Barclays they’re killing the planet: email them with market force’s template
- Educate yourself on the Climate Crisis and read up about what's going on with Barclays
- Ask your MP to back the Green New Deal to control the finance industry with this ready made email
- We know this works, we just need enough people to do it.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...