Tim Root says it’s time to shift the focus on to banks to secure action
Only those who dare to fail greatly can ever achieve greatly.” – Robert Kennedy
High-stakes decision-making is difficult, but climate campaigners need to get it right. We have a very short window in which to achieve emissions reductions before a) natural feedbacks add substantially to emissions, and b) evidence of escalating climate damage causes increasing defeatism and diversion of attention by citizens. Have campaigners’ decisions maximised the chances of getting emissions cuts in time?
Four weeks after the negative ending of COP26, there is little evidence of climate campaigns adopting a more promising strategy. One large international federation’s press release reacting to COP26 consisted of comments by many campaign leaders primarily hoping for a better outcome at COP27 a whole year later. Years of massive marches, lobbies, petitions and school strikes have achieved only a fraction of the progress we need. However, in most nations, public opinion is now firmly in favour of comprehensive climate action. A massive survey of fifty countries at all levels of development, covering over half of the world’s population, found that nearly two-thirds of people said that climate change is an emergency [pdf]. A poll of ten developed nations, including the USA, Germany, France and UK, found that 76% said they would accept stricter environmental rules and regulations. An EU poll found that 90% of Europeans agreed that carbon emissions should be reduced to a minimum; 74% agreed that the investment needed for a green transition is much lower than the costs of damage caused by climate change. In the UK, Demos’s Carbon Calculator poll found no less than 94% wanted a general carbon tax [pdf]; 93% wanted better public transport, while 82% wanted a 60 miles-per-hour speed limit. Campaigners need a strategy which will attract many additional activists and harness this public opinion more effectively than we have so far.
Governments’ inadequate efforts
The response from governments has been far from matching people’s sense of urgency. While there were some small advances at COP26, analysis of nations’ current plans for the period up to 2030 found that we are on course for an apocalyptic 2.4°C temperature rise. Even if all the new pledges announced at COP26 were implemented, temperature would still rise by a disastrous 1.8 to 1.9°C. As we are seeing already, the impacts would initially be most devastating in the Global South, but would affect all countries very badly.
It is now clearer than ever that campaigners should not devote most of their effort towards governments. As the famous scholar Erica Chenoweth pointed out, “Movements that over-rely on single methods—like protests or rallies—are less likely to win in the end.”
Climate campaigns, like most organisations, exhibit too much of the risk-aversion which Daniel Kahneman famously highlighted. Like many organisations, they are inclined to persist with familiar tactics rather than innovate.
A European Union survey which asked people to score their level of trust in the government out of 10, found that the average person scores their government at only 3.9. Only one Briton in eight believes that politicians who call for action on climate are genuinely concerned. And when we consider how the avoidable failures of many governments caused Covid to “trigger a catastrophic human and socioeconomic crisis“, and how the repeated failures of British governments for many years to act on flammable cladding led to the Grenfell tragedy, we can see why people lack confidence in governments. This cynicism makes it very hard to get people outside activist circles to believe that campaigning to influence governments would be worth the effort. In nearly all circumstances, governments are mostly concerned about the next election. Politicians believe that climate policy sways the votes of only a minority.
Push the banks for faster climate action
Our priority instead should be to target institutions which have a lot to lose in the short term if they fail to cut their emissions. The most significant ones are the banks, which play a huge role in the economy. Bank credit to the private sector is worth 98% of total world output. Between 2016 and 2020, the world’s top 60 banks put a massive $3.8 trillion into fossil fuels [pdf]. Overall investment in fossil fuels is over double that in renewable energy. Unlike oil or gas companies, banks can readily switch their business away from fossil fuels, and it appears that in the first five months of this year they have been doing so fairly significantly. So pushing the banks to improve faster is one of campaigners’ best options to get substantial early emissions cuts.
Following recent revelations about their use of tax havens, banks are even more anxious to avoid further harm to their reputation. Many influential insiders are warning banks that those that are slow to adapt to climate change “face negative financial and reputational consequences [pdf] that will erode their credit strength”. Campaigns which have been very active in the USA and France have already had some success in pushing banks to reduce fossil fuel financing. Three European banks have committed to halve their financed emissions by 2030 to ensure they are on track to meet their 2050 target. Eight have set interim targets for the most carbon-intensive sectors, while many French financial institutions have cut their support for coal.
If a bank suffers reputational damage, e.g. because of greenhouse gas pollution or other wrongdoing by a company it funds, the bank’s share price is likely to fall, sometimes drastically. Executives’ pay is linked to the share price, so this would go down as well. Banks are vulnerable to pressure. The Covid recession has weakened them financially, with many of their loans not providing the expected returns, and with profit levels relatively low. Losing customers to competitors is a major concern for them, with one director describing customer loyalty as “the most valuable commodity there is”. A poll of UK Barclays and HSBC customers in late 2020 found that about one in eight said they were very likely to consider changing bank [pdf] due to the bank financing fossil fuels.
The climate movement needs a strong high-profile campaign encouraging bank customers to switch, or to notify the bank that they will switch if it does not improve by a specified date. This campaign would be most effective by targeting one selected bank at a time in each country, maximizing our pressure, and showing its competitors that they would face the same pressure if they failed to improve. Talking to customers outside bank branches would be a Covid-safe activity, but in addition much of this campaigning could be via social media.
Well-targeted direct action
There are several other polluting sectors of the economy which could be weakened by activist pressure. These include manufacturers and retailers of high-emission cars, and companies selling goods which are imported by air for purely commercial reasons. I will not forewarn the others by naming them here. There are large numbers of activists who would be keen to name, shame and obstruct such companies. Such actions, targeting high-emissions products used only by affluent people, or products for which there are relatively low-emissions substitutes from other brands, would appear justifiable in many people’s eyes. Therefore these actions would be far more effective than the untargeted tactics of those organisations whose direct action has inconvenienced many ordinary people and risked harmful publicity. Sustained actions against such targets would show the markets that the prospects for high-emissions companies are poor, and thus boost investment in low-carbon products instead.
Such actions should be undertaken by organisations with names that highlight their responsible approach, e.g. ‘Climate Protectors’, rather than names whose connotations are negative for many people, or which polling has shown to be unpopular and lack credibility. The actions would encourage citizens by showing that the climate movement has the ability to reduce climate breakdown, and would also remind them that all excessive carbon footprints need to be reduced, strengthening norms of low-carbon consumption. Above all, such actions would increase the climate movement’s power, motivating companies to cut their emissions soon, and would show citizens that the climate emergency justifies radical direct action.