Warning: if you work for a bank, this is a rant and you probably won't like it
Over the last decade or so, there’s been a big rise of Greentech and Green Fintech. Unfortunately, the banking industry isn’t listening. I wrote a book about it, along with over twenty other contributors, and the gist is that we can use technology in finance to make the world a better place … except that bankers aren’t listening.
Since that book came out – just three years ago – investment in fossil fuel firms from the major banks of the world has increased whilst the focus on responsible banking has collapsed, as have the banks’ commitments to net zero. Just in the last week a wave of headlines emphasise how banks don’t care about our future planet:
Banking alliance aimed at limiting fossil fuel investments collapses
'Little progress': LSE study warns top banks are continuing to back new fossil fuel projects
Why Global Banks Are Exiting from the Net-Zero Banking Alliance
US banking regulators withdraw climate risk principles
Big-name banks slammed for supporting oil and gas expansion in Amazon rainforest
Some of UK’s biggest banks ‘investing ever larger sums into fossil fuels’
The last headline really got me as Barclays and HSBC have been hugely humiliated by Extinction Rebellion over the last decade, and yet still continue to frack the planet.
Will customers tell Barclays to frack off?
A banker responds to Extinction Rebellion’s call
The thing is that most bankers I talk to accept that they need a moral conscience and to invest ethically. They just don’t do it. Take the example of HSBC’s former head of responsible investments:
“Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages, and that’s a really nice place … the average loan length in a big bank like ours, HSBC, is six years. What happens to the planet in year seven is irrelevant … there's always some nut job telling me about the end of the world.”
Stuart Kirk Head of Responsible Investments
Stuart resigned shortly after that speech, and still seethes about how his views were misinterpreted. They weren’t. In a recent update on social media, he said that he suffered badly after that speech due to “the stress on my family. Giving up our London home. Being broke.” Tough, mate … but appropriate.
The thing that really gets me is that Stuart’s articulation of the banker’s view is spot-on. If the bank can get a good return on risk by funding fossil fuel firms for the next six years and then the planet falls off a cliff, that’s fine. The focus is on the six year return on risk, not year seven or 2050 or 2100.
All in all, when my children and grandchildren have to fly to Mars to get a life, banks will be sitting saying: nothing to do with us. Well, it’s all to do with you and your funding of fossil fuel firms, denying climate change, leaving the net zero alliance, ignoring the principles of responsible banking and so on and so on.
https://youtu.be/xPArEB2A9Gk
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...