Finance and corporates
Financial institutions and large corporations make substantial profits from, and hold considerable influence over, fossil fuel companies. Sectors like manufacturing, transport, and logistics are some of the biggest consumers of energy and can use their hefty purchasing power to prioritise suppliers with sustainable business practices. Financial institutions and investors provide much of the capital and support necessary for the exploration, production, and distribution of fossil fuels through loans, share purchases and insurance. The withdrawal of this backing can critically undermine the ability of fossil fuel companies to raise capital and maintain their damaging operations.
Profiting from destruction
Fossil fuel companies survive because they don’t pay the financial costs for the health and environmental damage they inflict, or the damage caused by extreme weather events which result from climate change caused by their activities. They enjoy generous government subsidies and have made bumper profits from Europe’s energy crisis at the expense of ordinary people. Every cent of support for these companies makes people poorer, sicker and less safe, and shrinks the amount of finance available to scale up the renewable energy solutions that we need.
Thankfully times are changing, and gradually the financial institutions that support fossil fuel companies are realising that they are not only risking their reputation with these investments, but also their money. Large corporations too are increasingly aware that their consumers expect them to clean up their supply chains and operations. They have various options for doing so, including installing renewable energy solutions on-site, upgrading the energy efficiency of their infrastructure and operations, and signing corporate power purchase agreements with suppliers of renewable energy.
Financial institutions and large corporations have a responsibility to propel the fossil fuel companies they do business with towards a rapid and just energy transition that includes commitments to close (not sell) coal plants by 2030, and fossil gas plants by 2035. Unfortunately, lots of fossil fuel companies either flat-out refuse or make green sounding commitments on paper that do not deliver in the real world. In both instances it is essential that those that do business with them withdraw their support.
Now is the time for those who have financed climate breakdown and engage in unsustainable business practices to take responsibility for the multiple crises they’ve helped get us into, and do their fair share to get us out. Financial institutions, investors, and corporations have a responsibility to mobilise every euro, industrial capability, and measure of influence to deliver intelligent energy savings, and massive renewable power rollouts and electrification programmes, starting now. Every heat pump, insulated house, solar panel and wind turbine protects people from fossil fuel shocks, promotes and enables peace, and permanently reduces living costs.