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The new battleground in the climate wars
Corporations are being made an offer they can’t refuse: align your business strategy with the Paris Agreement’s 1.5-degree temperature target or else. According to the We Mean Business (WMB) climate coalition, 550 companies have committed to reducing their greenhouse gas emissions in line with the goal of the Paris Agreement to limit the future rise in global temperature to 1.5°C above pre-industrial levels.4 If companies don’t take steps to becoming Paris-compliant, their access to finance might be curtailed. ‘Sustainability is no longer a matter of taking care of the environment to please millennials. It’s now a cost of capital issue’, says Peter Bakker, president and CEO of the World Business Council for Sustainable Development.5 In September 2019, Mike Bloomberg’s Climate Finance Leadership Initiative produced a report for the UN Secretary-General on mobilising capital to meet the Paris target. ‘The world requires a significant shift in investments that make financial flows consistent with pathways toward low greenhouse gas emissions’, wrote Bloomberg and his seven co-signatories – including the CEOs of Goldman Sachs and HSBC, the world’s third largest bank outside China – collectively responsible for $4.5 trillion in assets under management.6 Capital is not only to be switched to investments deemed socially acceptable; it is to be denied to those deemed unacceptable. A month later, Moody’s changed the outlook for Exxon Mobil from stable to negative, citing the threat of ‘potential carbon dioxide regulations’ as a factor.7 Higher energy costs are not popular. Given the chance, voters in the United States reject carbon taxes; in 2018, carbon tax proposals were voted down in Arizona, Colorado and, for a second time, in Washington State. Circumventing voters and the ballot box, climate activists seek to politicise businesses and turn them into tools to achieve public policy ends. ‘All businesses – especially those that to date have been silent on the threat of climate change – need to step-up their ambition and actions’, the WMB climate coalition says.8 In other words, companies are to be bullied and climate-shamed into taking action they judge contrary to their interests. Climate shaming is being given a huge boost by the greening of Wall Street. The G20 has a task force on climate-related financial disclosures, chaired by Mike Bloomberg. Under the guise of fulfilling their mandate for financial stability, financial regulators and central bankers have formed a so-called ‘Network for Greening the Financial System’. Although it doesn’t include the Fed or other federal regulators, one member of the Commodities Futures Trading Commission has said the risks posed to financial markets by climate change are on a similar scale to the sub-prime crisis.9 Christine Lagarde, president of the European Central Bank (ECB), wants climate change to be part of the ECB’s strategic mission. According to François Villeroy de Galhau, governor of the Banque de France, by increasing energy prices and lowering economic 1
