22 April is Earth Day, and the theme for 2023 is ‘Invest in our planet’. There are plenty of awareness days and weeks through the year that merit attention, as Earth Day has been doing since 1970. However, there’s a finite amount of good that ‘attention’ can do. Given that it’s in its 52nd year, this Earth Day should merit not just attention, but action. If we keep merely giving ‘attention’ to the planet for the next 52 years, there won’t be much left to pay attention to.
All of our actions have an impact, but banks and financial institutions are able to leverage resources in a way that other industries cannot. As an industry, we can, and should, be spearheading action. Pressure on the financial sector needs to build so that institutions are compelled to make strategic decisions that focus on the wellbeing of people and the planet, instead of pure profit.
How best to communicate this message to bosses across the financial services industry? The answer, as always, lies in the numbers. Here are three numbers to explain why I hope this Earth Day can be a turning point for concerted action
The first number is 1.5
That’s the number of degrees we must limit global heating to, without causing untold and irreversible environmental damage. The World Meteorological Organisation has predicted that we have a 50:50 risk of hitting this limit within the next five years, which is a brutal reminder of both how urgent the situation is and that time is running out.
The second number is £340bn
That’s the cost of climate-related losses the Bank of England speculated that British banks and insurers may face by 2050. It’s a sum so enormous that it would do untold damage to our financial services industry. More importantly, lying behind that number are the customers of the banks who will be facing the costs of dealing with events such as flooding to their homes, amongst other threats that are predicted to increase due to the heightened risk of environmental changes that is not currently being addressed.
The third number by contrast is $4.6trn
This is the amount the world’s top 60 private-sector banks have provided to finance fossil fuels since the Paris Agreement in 2015, according to the Banking on Climate Chaos report published in 2022. This is a colossal number that shows us that despite all the evidence and all the warm words, the financial sector is still funding the fossil fuel sector to the tune of approximately $1.8bn every single day. This cannot be allowed to continue.
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Lending to the fossil fuel industry is no less damaging to the world’s climate than investing in it. That’s precisely the opposite of what we should be doing. I know that the environment is right at the top of the agenda for our customers (because at The Co-operative Bank we asked them – in 2021, nearly 50,000 of our customers told us that protecting the environment was the most important issue to them). That’s why we refuse to fund the extraction or production of fossil fuels, and we haven’t done so for over 20 years.
Cooperative Bank backs The Climate and Ecology Bill
I’m proud of that stance, but I’m also aware that we are but one organisation. We can’t do it on our own. The only way that this change will happen is through legislation. With that in mind, The Co-operative Bank is backing the Climate and Ecology Bill which is scheduled to be re-introduced with all-party support in the House of Commons on 10 May. This Bill would give both government institutions and companies across the UK the capability to tackle the climate and nature crisis together, in the ultimate act of co-operation. It would require the UK government to act urgently to drastically reduce the UK’s contribution to global emissions and to restore biodiversity, rather than allowing politicians to make empty pledges. It would ensure that the UK devises a joined-up strategy to play our part in keeping global heating down to 1.5°C and to reverse the destruction of nature by 2030.
The ’Zero Hour’ campaign
The Bill is a private member’s bill, propelled by a grassroots movement that is gaining momentum. The ‘Zero Hour’ campaign (which backs the Bill, and of which I’m proud to be an ambassador) has 126 MPs and 39 Peers backing the Bill. In addition, 226 local authorities have passed motions of support along with over 475 charities, community groups and businesses.
I’ll keep campaigning with Zero Hour for more MPs and Peers to back the Climate and Ecology Bill. In the meantime, I’m also calling on our banking peers to stop financing the fossil fuel industry. Banks could play a make-or-break role in the reversal of present environmental destruction, and if we don’t start to dismantle this process ourselves, then legislation will. If it really takes legislative action from Parliament to force lenders to change their bad habits, then this won’t take long: the Ecology Bill would make direct fossil fuel financing more punitive for the creditor, so they redirect investment and become a catalyst for real behavioural change.
But why should the public have to wait at all for their banks to be pushed into doing the right thing? I’m calling on our industry peers to join us on this journey and be at the forefront of that movement. ‘Invest in our planet’ shouldn’t just be a slogan for this Earth Day, it’s a moral imperative for financial institutions around the world.
Nick Slape is CEO, The Co-operative Bank