This Tuesday Westpac bank’s General Manager Business Banking and Wealth Simon Power (yes, that Simon Power) had an opinion piece in the New Zealand Herald describing Westpac’s 2013-15 ‘Sustainability Strategy’.
That strategy focuses around five key areas “to help us roadmap and benchmark our contribution to long-term sustainability”, those being:
- cleantech investments,
- building sustainable financial futures through education and access to social and environmental housing,
- ensure their workforce represents a changing population and has access to flexible work options,
- contributing to communities locally, and
- ensuring our operations are sustainable by reducing our carbon footprint.
A few hours later the NZHerald had another article about Westpac, this time picturing Power alongside ‘Greenhouse’ director Duncan Stewart a specialist consultancy that provides commercial insight on clean-tech and low carbon business capabilities. Westpac were proudly unveiling a $150 million funding infusion over the next two years. Westpac head of sustainability Grant Fleming said that renewably energy, green building, forestry and waste reduction enterprises were all potential targets.
In fact, it would appear that this almost par for the course for Westpac, and in January they were named the most sustainable company in the world at the World Economic Forum in Davos.
It sounds pretty good, right? The $150 million Westpac are investing in clean tech may only be a fraction of their recent profits, but it’s definitely a step in the right direction.
However this investment sits uncomfortably alongside Westpac’s financing of Bathurst Resources, the cash-strapped mining company that wants to dig up some 84 million tonnes of coal from the Denniston Plateau and release 218 million tonnes of carbon dioxide into the atmosphere. 350.org.nz, a grassroots climate change organisation, has been campaigning against the mine, and is encouraging people to tell Westpac how they feel and shift their money to a different bank.
Investments in fossil fuel are increasingly subject to criticism, not just for their climate change risk, but for the financial risk that emanates from this. A report from the Carbon Tracker Initiative argues that given the global carbon budget required to reduce the risk of exceeding 2 degrees of global warming
“investors are thus left exposed to the risk of unburnable carbon. … [O]il and gas would be subject to impairment as these assets become stranded.”
In other words, fossil fuel investments are part of a big speculative bubble that will crash sooner or later, adding greater risk to the financial system itself.
Further, we need to remember that climate change carries with it critical social implications to radically magnify inequality. As Andrew Winston writes in the Guardian:
the divide between environmental and social is mostly artificial, and that’s especially true with climate change. Our changing planet is the ultimate social issue, since those with the fewest resources are least able to adapt. Remember the Titanic? When the ship went down, the people in steerage were hit hardest. In climate terms, the increase in flooding and sea-level rise will have the greatest impact on many of the poorest regions, such as Bangladesh. And the outcomes from a changing climate, including droughts that destroy crops and raise food prices, are hardest on those who can least afford it.
So, while it may be great that Westpac is investing clean tech and has a fancy sustainability technology to boot, perhaps it should look more closely at its existing investments before it goes blowing its own trumpet all over the show.