Climate activists are taking on a new pipeline: The one that funnels money from Wall Street into planetary destruction.
A coalition of climate, environmental, youth, and indigenous organizations unveiled Stop the Money Pipeline, a campaign to “pressure banks, insurance companies and asset managers to stop financing fossil fuels and deforestation and start respecting human rights and Indigenous sovereignty,” late last week.
Banks, asset managers, and insurance companies may seem like less obvious targets than going directly after, say, oil and gas companies or the Trump administration. But Wall Street plays an essential role in the fossil fuel industry’s expansion. Staunching the flow of money could be an effective way to prevent more oil, gas, and coal from being dug up, which is exactly what has to happen (and then some) to avoid catastrophic climate change.
Though many banking institutions have branded themselves as green, the world’s top 33 largest banks collectively provided $1.9 trillion in financing for coal, oil, and gas companies since countries put forth the Paris Climate Agreement in 2015.
“There are only a few major companies like Exxon Mobil, who can self-finance a project and put up all the money themselves,” Jamie Henn, 350.org co-founder, told Earther.
There’s precedent for successful public pressure campaigns going after money that finances fossil fuel exploitation. The divestment movement led by 350.org has seen colleges and universities, cities, religious institutions, and pension funds to withdraw their investments from fossil fuel corporations. The climate divestment movement itself is modeled after the successful efforts to divest from apartheid South Africa in the 1970s and 1980s.
In late 2018, the movement hit a milestone with 1,000 groups agreeing to divest from fossil fuels. The number has since risen to nearly 1,160 groups managing $12 trillion (though not all of it is in fossil fuels).
There are other recent successes beyond divestment as well. Due at least in part to public pressure, Goldman Sachs became the first major U.S. bank to stop funding oil drilling in the Arctic National Wildlife Refuge last month. An in July, Chubb announced it will be the first U.S. insurer to phase out its coal investments and insurance policies within the next three years. The four largest European insurance firms no longer cover coal power-related projects.
That action can’t come soon enough. The United Nations’ (UN) recent Production Gap Report shows that within a decade, planned fossil fuel production will “more than double what’s allowable to avoid 1.5 degrees Celsius of global warming.” This year’s UN climate talks in November will also focus specifically on the role of finance in furthering the climate crisis. By that time, the campaign hopes to see firm commitments from banks and insurers to not finance projects that worsen climate change, and to instead fund renewable energy and reforestation.
“So while that is an incredible amount of money and it means a lot to the planet,” she said, “some of these institutions can make small shifts in their portfolio—really less than 10 percent effectiveness—and accomplish a lot for the planet.”
And then there’s BlackRock, the world’s largest asset management firm with nearly $7 trillion in assets worldwide. It’s also the largest investor in commodities linked to fossil fuels and deforestation. BlackRock CEO Larry Fink frequently calls on corporations to take on a “social purpose.” But his company is the world’s top investor in public oil, gas and coal companies, and is among the world’s top shareholders in companies that deforest the Amazon to produce and trade soy, beef, palm oil, pulp and paper, rubber and timber.
Last Thursday, BlackRock announced that it’s joining the Climate Action 100+, a group of investors that manage assets worth over $35 trillion worth, which pressures the world’s biggest polluters to show how they will reduce their greenhouse gas emissions.
They might not have to wait long to see results. After Blackrock’s shift last week, the firm’s CEO said in his annual letter that the world is “on the edge of a fundamental reshaping of finance,” and announced that the company will no longer invest in thermal coal.