Greening our Financial Sectors?

Welcome back to my blog! 

 I was flabbergasted when I chanced upon a report from the CDP that found that just 100 corporations have been responsible for 71% of global industrial emissions for the last 30 years. Mulling about this topic, I began researching about it in-depth and was sucked into fascinating articles about corporations that despite having no direct impact on the environment, possessed a massive influence upon other corporations that do. Today, I’d like to share more about how certain sectors can exert their economic influence to lobby against these environmentally polluting corporations.

For the longest time, civil societies have been lamenting and reporting about corporate influences on environmental issues. Be it conspiring to mislead the public about climate change or funding economically profitable, environmentally damaging projects in various countries, corporate influences have been seen as detrimental for the environment. However, as the impacts of climate change begin to affect business profits, corporations have gradually been forced to take actions against climate change. 

 The vast influence possessed by these corporations stems from their economic power. Their sheer wealth means that corporations can bring forth dramatic shifts to solve or slow down our climate crisis. In particular, the top 1 per cent of corporations globally generates 36 per cent of all economic profit, according to a study by McKinsey Global Institute. It is understood that some corporations whose sole benefits are based on our use of environmentally damaging resources like coal and oil companies. Instead, we can push for businesses who play a significant role in funding coal business operations to divest from fossil fuels. Thereby catalysing a shift from fossil fuels and precipitate a change in the dynamics of energy use worldwide. The eight annual Fossil Fuel Finance Report Card found that “Asian banks continue to provide over US$95 billion to the fossil fuel sector, financing some of the world’s most environmentally destructive practices”, showing that by removing sizeable funding from coal, it sends a compelling message to corporations and policymakers that the financial sector opposes coal-fired energy production. (Hicks, 2017; Ruppli, 2017) With that, our top 3 banks (DBS, OCBC and UOB) recently announced that they would stop funding coal power projects and investing in renewable energy instead. 

 My previous post on Patagonia, a leading clothing company, wholly devoted to the environmental cause is an indication of how corporations can use their resources to promote sustainability. Internal corporation politics could be a hindrance to the formulation of pro-environmental policies unless the top management are environmentalists themselves. As I see it however, it is inefficient to convince all top managements about our environmental crisis. What we should do instead is to make corporations jump on the environmental bandwagon willingly by targeting key parties who have high stakes in many corporations. Just as how our local banks’ shifted towards renewable energy, their shift would precipitate a chain effect for other corporations to follow. 

In conclusion, the influence possessed by investors of fossil fuel companies accounts for just under a quarter of industrial greenhouse gas emissions. With certain sectors like the finance and insurance industry acting as significant financial pipelines for the major carbon emitters, companies from these sectors should leverage their massive influence to keep a lid on global warming by shifting towards renewable energy.

 

References: 

  1. (Leonard, 2019) This is how we’re shutting down fossil fuel finance. Retrieved from: https://350.org/this-is-how-were-shutting-down-fossil-fuel-finance/(The Carbon Majors Database, last accessed 26 October 2019) CDP Carbon Majors Report 2017. Retrieved from: https://b8f65cb373b1b7b15feb-c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms/reports/documents/000/002/327/original/Carbon-Majors-Report-2017.pdf?1499691240
  2. (Ruppli, 2017) Asian banks are world’s biggest investors in fossil fuels, study finds. Retrieved from: https://www.eco-business.com/news/asian-banks-are-worlds-biggest-investors-in-fossil-fuels-study-finds/
  3. (Hicks, 2017) Divesting from fossil fuels will take time: DBS sustainability chief. Retrieved from: https://www.eco-business.com/news/divesting-from-fossil-fuels-will-take-time-dbs-sustainability-chief/
  4. [Image]. Retrieved from: https://www.rappler.com/science-nature/45838-chevron-shell-carbon-emitters

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