On Tuesday evening, February 18th we discussed the World Development Movement campaign on banks’ investments in fossil fuels.
The UK finance sector is bankrolling climate change. Banks, pension funds and other finance companies are funding dirty energy projects that are destroying people’s lives and pushing the planet to the brink of catastrophe. Yet millions of people have no access to electricity.
Across the world, people are resisting dirty fossil fuel projects affecting their communities, and looking for better ways to ensure people have access to energy.
The UK finance sector has a massive impact on climate change. In spite of government targets to reduce the UK’s carbon emissions, the finance sector pours billions of pounds into coal, oil and gas extraction across the planet. Shares in fossil fuel companies are worth £900 billion on the London Stock Exchange. The top five UK banks underwrote £170 billion in bonds and share issues for fossil fuel companies between 2010 and 2012 – more than eleven times what the UK contributed in climate finance for developing countries in the same period.
The UK’s five biggest banks – RBS, HSBC, Barclays, Lloyds and Standard Chartered – are all major financiers of fossil fuels. The country’s three biggest pension and life insurance companies – Prudential, Legal & General and Aviva – also invest billions of pounds in dirty energy. But by no means does it end there, with hundreds of less well-known finance companies involved in this dirty business.
Many fossil fuel projects financed by UK companies have devastating effects on local communities. People are often displaced from their land, or see the land, air and water they rely on polluted and their livelihoods destroyed. Pollution from fossil fuel extraction can cause severe health problems. Violence and repression are also often associated with extractive industries.
Coal, oil and gas projects are expanding across the world, often in countries and communities where many people have no access to electricity. But very often, corporate-led fossil fuel projects fail to increase energy access, instead producing energy for export or for use by multinational companies. Companies who make their decisions based on their financial return often don’t see it as cost effective to provide electricity to the poorest communities, or those living in rural areas. Yet, these are often the people who lack access
A web of close links exists between the UK government and the finance and energy industries. One third of ministers in the current government have links with these industries, whether through former employment, receipt of donations, or use of their influence in favour of particular companies. Meanwhile, executives at big finance and energy firms are often appointed to serve on government committees or regulatory bodies.
The government must take its commitment to tackle climate change seriously, and stop the UK finance sector pouring money into fossil fuels. As a first step, the World Development Movement is calling on the government to force the finance sector to come clean on the carbon emissions released by the projects it bankrolls.