To truly manage the climate crisis, we must have leaders who care about it, and are willing to learn, writes Hannah Duncan.
Image source: Pexels / Darren Patterson
Last month, David Malpass, president of the World Bank, refused to acknowledge the climate crisis. After dodging questions about global warming, he eventually answered, “I don’t know. I’m not a scientist.” brilliant. This is the man charged with “promoting prosperity for the poorest” and “helping to create sustainable economic growth”.
Nobody has time for ‘artificial ignorance’
By claiming not to know about climate change, Malpass played the classic greenwashing card. “Manufactured Ignorance”. According to Oxford University professor and author of The Culture Audit of Financial Services Roger Miles, this is one of the greatest financial hits when it comes to evading climate responsibility. False ignorance “designed to bypass core questions.” After all, you can’t fix a problem you don’t know about, right?
This is something Tom McGillicudi remembers very well. After years of frustration with current banking, he co-founded CIRCA 5000, a fintech platform for impact investing. “It seems the industry has been mostly against change and considering the impact.” In some cases, we have been advised to “ignore” sustainable opportunities because they “disrupt what we are doing”. This, from banks that market themselves as “reacting to climate change”.
Can old banks re-educate themselves in time?
Someone on a mission to change this is the activist and Triple Masters holder, Zoe Cohen. At its most recent general meeting, I asked the Barclays Board of Directors to speak with the government’s former chief scientific adviser, Sir David King. She hopes that this can eliminate artificial ignorance once and for all. “Once you know the truth, you have a moral obligation to act,” she asserts. “No one can argue that they don’t know.” As expected, the board members, who were “smiling” were slow to act on their obligations. “They kept trying to get me off,” Cohen says.
However, some industry leaders believe that bankers want to support climate change and that ignorance is not artificial. “As with any fast-growing movement, there is a portion of companies and people who want to get involved without really knowing what they’re doing,” said the CEO of the Chartered Banker Institute and author of Green and Sustainable Finance, Simon Thompson.
Thompson has launched a series of accredited training courses to support change. He also offers short talks alongside others, including Miles (and myself) to Open Sustainability, an online resource for financial services. He honestly believes that most of them want help.
But I’m not sure. Because, besides artificial ignorance, there are swathes of other toxic barriers at the heart of sustainable finance. Check the box, vanity scales, fear of change, dictator-style cultures…we don’t have time for this ***. The planet is suffocating now.
Toxic practices stand in the way of saving the planet
The usual method for Greenwash banks is a neat trick known as “vanity metrics” or “performance,” Miles reveals. This happens when companies make a big song and dance about how much research or money they spend on a problem, rather than actually fixing it.
Take JP Morgan Chase – it generates sustainability reports left, right, and center. Not to mention airing its $2.5 trillion goal to tackle climate change over the next 10 years. You wouldn’t believe that this is the same company that poured $382 billion into fossil fuel financing…34 percent more than any other bank in the world. Including $61.7 billion last year, they wrote an ESG report. Call me a pessimist, but I don’t think they’re all observant.
Another classic is “boxing”. “ESG is the perfect tool that allows existing banks and investment firms to continue to do exactly what they have always done while ticking this sustainability box,” McGlicody sighs. “The results are easily falsified…it’s just marketing rhetoric.” Greg Davies, Head of Behavioral Sciences, at Oxford Risk, agrees. “For many organizations, the fact that they can tick some ESG boxes is probably where they end up,” he adds.
We have some of the worst people driving the transition
To fix these systemic problems, we must look to leaders. Take Malpas. He is a Republican candidate who started his career selling mining equipment at Esco Corp. With all that privilege left behind, he became chief economist at Bear Stearns & Co, an investment bank best known for its role in the 2008 financial crisis. Why does it acknowledge global warming? His bank account is dripping in oil, he’s probably bathing in things.
Even more worryingly, this man – who appears to be allergic to morals – was allowed anywhere near sustainable funding to begin with. This is the real problem.
Unfortunately, Malpass is just the beginning. Look at the six CEOs responsible for pumping $1 trillion into fossil fuel financing, since the 2015 Paris Agreement. They are all from the same toxic quagmire. They care more about profit than the planet and always will.
“[This] A group of people at the top got to exactly where they are by not focusing on anything other than financial reward,” comments Davies. In the words of McGillycuddy, “Why would they change the formula?”
Fix it or get out of the way
To truly manage the climate crisis, we must have leaders who care about it, and are willing to learn. Alison Rose, CEO of the NatWest Group is a great example. We need more like her.
What we don’t need are more of the same money-obsessed psychopaths. Old school bankers need to do things right or get out of the way. Our planet has no time for their bulls***.