Choose banks that invest in our planet

An aerial view of the Wells' protection works at the Baricho Water Works at the banks of River Sabaki in Malindi Sub County, Kilifi County. [File, Standard]

Have you ever wondered how else your bank could make your life better?

Well, many of us, grateful for the Corporate Social Responsibility efforts, like school feeding programmes, sponsorship of sport events and education of the less fortunate, have been blind to a lot of chaos masked underneath.

Researchers have periodically looked into banks’ role in global warming, and just last week, a report dubbed “Banking on Climate Chaos 2023” revealed reluctance to make things right by the biggest lenders.

In an era when transition from fossil fuels to renewable energy is seen as the panacea for an imminent climate crisis, some of the world’s biggest banks are still minting profits from new extraction projects, disregarding commitments to achieve Net-Zero.

Only 17 of world’s 60 biggest banks (by asset) have policies prohibiting funding of new coal projects. But why, you may ask, should a bank bother to know how money they lend is used? Even for a small borrower, they ask questions.

Coal powered industrialisation in the West is to blame for the climate disasters that hit hardest in Africa and other parts of the global south due to poor infrastructure, inadequate technology and financial muscle.

Fossil fuel projects need huge financing and insurance. The East African Crude Oil Pipeline project, for instance, was initially valued at $5 billion, with $2 billion expected from investors and $3 billion from lenders. To nip any problem likely to result from such projects in the bud, several banks and insurance companies kept off. They are the heroes.

But still, according to “Banking on Climate Chaos 2023”, many lenders continually avoid “coal-specific financing, insurance and investment” policies, hence worsening the climate crisis.

Well, today is Earth Day, and we are reminded, for the second consecutive year, to “invest in our planet”. Is your bank funding new fossil fuel projects?

Just remember for every cent invested in such projects, the climate change mitigation goals are compromised, and the immediate effects will be on you and your people down here. It is your relatives that will be in IDP camps when it floods. Your people will lose livestock, crops and source of livelihood when drought persists or conflict arises over scarce natural resources. People in the grassroots, who never really benefit from the new fossil fuel projects, lose land needed for the massive infrastructure that these projects require.

A lot of the time they are not compensated fairly. Some have been arbitrarily arrested or tortured, shrinking the civil rights space. One way out of this for nations and firms is to sign the Fossil Fuel Non-Proliferation Treaty, which went past the Senate’s hearing in California on Thursday. This will help end investment in new fossil fuel projects or deforestation, and encourage just transition to renewable energy, especially for entities that earn from existing projects.

It is not about halting existing fossil fuel projects, but phasing out old ones and transiting to cleaner renewable energy for the sake of our health and Earth’s wellbeing.

Cognizant of their role in the climate crisis, banks and insurers must track the amount of emissions from the fossil fuel projects they fund, know the immediate and long-term effects of such, and come up with policies that prohibit further wrongdoing.

The big banks must demand from their existing clients, plans to achieve Net-Zero. Banks can still find returns from investing in greener projects. Let’s invest in our planet in ways favourable to nature, economies and our social being now and in future.

The writer is communications manager at GreenFaith. @lynno16 | [email protected]