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(Not very) funny money
Citibank tries to fool some nuns, who are not fooled.
Our chances of getting out of the climate crisis are only so-so—and they get materially lower every time some important institution decides not to face facts. In this case, the effort was almost comical—one of the world’s largest banks tried to gaslight a small group of nuns. Clearly these bankers did not go to parochial school, or they would have known this was unlikely to end well.
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Here’s the story. The Sisters of St. Joseph of Peace own some shares of Citibank. They filed a resolution for April 25th’s annual general meeting, asking that Citibank report what it was doing to protect indigenous rights. It said, specifically, that Citi had “provided over $5bn to [pipeline company] Enbridge, enabling the widely opposed Enbridge Line 3 and Line 5 pipeline reroutes.”
The two pipelines in question stretch from the tarsands, carrying some of the world’s dirtiest oil under some of the world’s most important waters (the Mississippi River and the Great Lakes to be exact). They were opposed by all kinds of people, including tremendous resistance from Indigenous groups whose traditional lands they cross.
But rather than confess, or even repent, Citibank decided to spin—indeed, it engaged in the kind of rhetorical hijinks I fear we once called Jesuitical. In a message to shareholders, Citibank said, specifically, “the proponent asserts that Citi is providing $5 billion in financing to the Enbridge line 3 pipeline expansion, which is untrue.” You see, it’s untrue because they didn’t provide money directly for the project—they just provided a loan for the general support of the pipeline company.
The amount of logic it takes to pull apart this claim is…minimal.
Let’s say I go into a Citibank office and meet with a loan officer and tell him I need a loan.
He’s curious: what for?
Oh, I tell him, there’s a large shipment of illegal drugs arriving soon that I want to buy a share of.
I’m sorry, he says, but we don’t lend money for illegal drugs.
Oh, I counter brightly, what if you give me a loan for…’general home improvements.’
That we can do! he says happily (and of course with the confidence that I’ll soon have plenty of drug money to pay him back).
Look—Enbridge went all out to build that pipeline across the upper Mississippi; among other things, they laid out huge sums to local law enforcement, essentially turning them into corporate cops, who then proceeded to beat up and intimidate protesters.
Tara Houska of the Indigenous collective Giniw, who led much of that protest, said it bluntly:
When you lend $5B to Enbridge, one of the biggest oil pipeline companies in the world, it’s not rocket science to figure out where the money is going. Many Ojibwe nations directly opposed Line 3, there were over 1,000 arrests trying to protect Ojibwe treaty territory, the Mississippi River headwaters, the drinking water of millions downstream. Enbridge went ahead anyway.
More and more people are fed up with this kind of constant nonsense—the trimming and prevarication designed to let business-as-usual last a few years more. NPR reported yesterday that at least 540 shareholder resolutions related to social concerns have been filed in advance of annual corporate meetings which will be taking place in the next few weeks, and that at least a quarter of these are about climate change.
Most resolutions are non-binding, but just introducing them has proven to be an effective tool for activist investors. Last year, shareholders withdrew a record 110 proposals that were focused on climate change after they struck deals with companies, according to Ceres. Another 15 climate resolutions that went to a vote at various corporations won majority support from shareholders.
Groups like As You Sow are taking on big insurers like Chubb, and they’re not being swayed by small concessions—the insurer said that it would no longer underwrite projects in protected natural areas (thanks!), but As You Sow president Danielle Fugere pointed out, it’s hard to even tell what it means: “Chubb does not currently report the greenhouse gas emissions associated with its insuring, underwriting, and investing activities so the company remains largely unaccountable to investors with regard to its climate contribution or its reduction of greenhouse gas emissions.”
The focus is tightest on banks—they continue lending huge sums for things like liquefied natural gas export terminals despite all their promises to the contrary. Thirteen hundred scientists yesterday called on JP Morgan Chase to to “phase out its financing—including loans, bonds, and underwriting—of companies engaged in fossil fuel expansion.” As Kathy Mulvey, who runs the Climate Accountability Campaign for the Union of Concerned Scientists put it,
"To safeguard communities, investors, and the global economy, shareholders should insist that banks incentivize swift and deep cuts in heat-trapping emissions to limit climate change harms and facilitate a just transition to a clean energy economy."
Here are a few of the other projects I know about coming up in the next few weeks:
+Stop the Money Pipeline’s Shareholder Showdown Campaign, whose website includes a nifty FAQ on shareholder action.
+A parallel effort to petition key state treasurers to try and get them engaged, voting with their giant pension funds
+Big demonstrations outside the general meetings of Citi, Chase, Bank of America and Wells-Fargo, organized by groups like Rising Tide, New York Communities for Change, the Oil and Gas Action Network, Extinction Rebellion, and Third Act
And if you’re wondering if all this action directed against the financial sector can pay actual dividends, I have good news. For more than a decade now we’ve been building the fossil fuel divestment movement, which urges institutions to sell their shares in coal, oil and gas companies. It’s become very large—$40 trillion in endowments and portfolios that have begun to cut their ties with hydrocarbons. Many of you have worked on it; because it has so many targets it may have been the single most labor-intensive part of the climate resistance.
And new research this week indicates just how well it’s worked. As the Financial Times reported yesterday, a new study from academics in Stockholm, Brussels, and Harvard indicated:
Fossil fuel divestment pledges by investors including sovereign wealth funds, trusts and foundations which gain traction on social media have an outsized impact on carbon-intensive companies, wiping billions off their market value, new research has found.
You can find the underlying paper here, and I’m going to reprint the abstract just because…it makes me feel good. And it should make you feel good too.
A common argument against divestment is that it jettisons voting power and that it has a small effect on stock prices. We argue that divestment is a form of voice that changes social preferences. We show that the Go Fossil Free divestment movement has had a disproportionate impact on share prices by changing the economic narrative. By stigmatising target companies, it has increased stranded asset risk. Divestment pledges that went viral have depressed share prices of all high carbon emitters, including those with no significant divestment. Peak virality coincides with an increase in the carbon premium and precedes net- zero commitments from countries, regions, cities, and business. By altering the social and regulatory environment, divestment induces risk averse investors to decarbonise their portfolios, further reinforcing the narrative.
We’ve known for a long time that divestment is working, because fossil fuel companies have had to say so: when Peabody Coal went bankrupt it listed divestment as a big reason, and Shell had to tell its shareholders in its annual report that the campaign had become a “material risk” to its business. But it’s always nice to have academics back up the findings—and to show that talking about it makes the effect much larger.
So let’s keep at it. The next big showdown is over California’s pension funds, and you can help. Hearings start tomorrow on Senate Bill 252, and here’s how to be heard. If they try to mess with you, channel your inner nun.
In other energy and climate news:
+A Harvard law professor theoretically engaged in climate work was caught lobbying the Securities and Exchange Commission on behalf of oil giant Conoco Phillips, which it turns out pays her $350,000 a year. I guess the only conclusion is that Harvard needs to pay its professors more (which should be possible because a grad—identified as the GOP’s ‘top megadonor’—gave them a $300 million gift yesterday, in return for which they will name their graduate school in his honor).
Meanwhile in academia, Chris Jones—perhaps the top critic of the environmental impacts of industrial agriculture in Iowa—resigned his post at the state’s university after unrelenting pressure from corporate interests. His new book, Swine Republic, is out next week. If you’re wondering why these interests dislike him, consider the calculations he once performed to show how much waste the state’s farm animals were producing
Iowa hogs: equivalent to 83.7 million people;
Dairy cattle: 8.6 million people;
Beef cattle: 25 million people;
Laying chickens: 15 million people;
Turkeys: 900,000 people.
“In total, these five species generate the waste equivalent to that produced by about 134 million people, which would place Iowa as the 10th most populous country in the world, right below Russia and right above Mexico.”
+At least two dozen environmental activists have been murdered so far this year in central and South America, the latest a Mexican anti-mining campaigner named Eustacio Alcalá Díaz.
+The New York Times carried an oped by Joe Fassler making the best argument I’ve heard yet for why it’s worth time taking on the environmental impact of the superyachts enjoyed by various oligarchs and plutocrats. Not only are they dirty as hell (Rising Sun, the 454-foot, 82-room megaship owned by the DreamWorks co-founder David Geffen. According to a 2021 analysis in the journal Sustainability, the diesel fuel powering Mr. Geffen’s boating habit spews an estimated 16,320 tons of carbon-dioxide-equivalent gases into the atmosphere annually, almost 800 times what the average American generates in a year), but the fact that these guys get away with it makes everyone else less likely to pitch in:
Research in economics and psychology suggests humans are willing to behave altruistically — but only when they believe everyone is being asked to contribute. People “stop cooperating when they see that some are not doing their part,” the cognitive scientists Nicolas Baumard and Coralie Chevallier wrote last year in Le Monde. In that sense, superpolluting yachts and jets don’t just worsen climate change; they lessen the chance that we will work together to fix it. Why bother when the luxury goods mogul Bernard Arnault is cruising around on the Symphony, a $150 million, 333-foot superyacht?
“If some people are allowed to emit 10 times as much carbon for their comfort,” Mr. Baumard and Ms. Chevallier asked, “then why restrict your meat consumption, turn down your thermostat or limit your purchases of new products?”
+Are we still doing Bitcoin? Yes, we are and the Times also has a truly depressing piece on the environmental costs of the “mining enterprises” running giant computers around the clock to turn out this unnecessary commodity:
It is as if another New York City’s worth of residences were now drawing on the nation’s power supply, The Times found.
The additional power use across the country also causes as much carbon pollution as adding 3.5 million gas-powered cars to America’s roads, according to an analysis by WattTime, a nonprofit tech company. Many of the Bitcoin operations promote themselves as environmentally friendly and set up in areas rich with renewable energy, but their power needs are far too great to be satisfied by those sources alone. As a result, they have become a boon for the fossil fuel industry: WattTime found that coal and natural gas plants kick in to meet 85 percent of the demand these Bitcoin operations add to their grids.
+Andrew Nikiforuk offers a bleak assessment in the Tyee of our chances to mine enough metals for a renewable energy economy, ending with
Fundamentally, we need to talk about a future of less instead of a future of more. Society will have to build simple products that last and that can be easily recycled.
Meanwhile, Ted Nordhaus and Adam Stein write in Foreign Policy that regulations are threatening to impede a possible resurgence in nuclear power.
Absent substantial regulatory reform, the future of nuclear energy in the United States will look very much like the past. Licensing of advanced reactors will proceed in much the same way it has for conventional reactors for decades: slowly, expensively, and with an excess of precaution so extreme that observers have long quipped that the NRC’s view of nuclear safety is that the safest reactor is one that will never be built.
Meanwhile meanwhile, the redoubtable Sammy Roth in the LA Times, offers a glimpse of the size of the task ahead
Over the next decade, the California Independent System Operator says in the draft report, the state should spend at least $7.5 billion on transmission projects that would support renewable energy growth. Plus another $1.8 billion on projects that would help prevent blackouts — which are getting more difficult to avoid as rising temperatures drive up demand for air conditioning, and as the power grid becomes increasingly reliant on solar panels that stop generating electricity after dark.
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