By: Malavika Venugopal in collaboration with The Community Post
Over the week of 20th April - 24th April, We Don’t Have Time  organized 3 hour-webinars everyday on climate and energy transition topics. We Don’t Have Time is a movement and a tech startup that leverages the power of social media to hold leaders and companies accountable for climate change . They brought together a myriad of speakers, entrepreneurs and journalists to shed light on 5 major topics. In this article, I will be summarizing my key takeaways from the first topic. The subsequent topics on circular economy, health & education, food & agriculture, and importance of local governance will be covered in the subsequent articles.
Topic 1: Climate Finance
The United Nations Framework Convention on Climate Change (UNFCCC) defines climate finance as “sources of financing drawn from public, private and alternative sources, to support mitigation and adaptation actions addressing climate change”. These financial resources are of utmost importance to adapt to adverse effects and reduce the impacts of climate change .
One of the key messages put across during the first session was how today’s banking sector and forceful economic growth makes our economy vulnerable for a collapse from time to time. Explained simply, most of the ‘money’ that we use, are created by banks. The ‘money’ created by banks for loans are credit. It is temporarily on loan from the bank, and at some point in the future, it must be repaid to the bank, along with the interest. When it is paid back, the credit is balanced out. But how dependable is this ‘creation’ and ‘destruction’ of credit, that we all rely on every day? Banks make their profits from the interest levied on the loans, hence as long as banks are confident in the economy, they keep giving out loans. However, when there is a pandemic or economic slowdown, banks reduce the amount of loans given out, pushing the slow down even further, until some small businesses have to shut down. This is what causes a financial crisis .
What began as a way to simplify cross-currency transactions, and invest money not spent by people on developing community businesses, now has become a profit-oriented business increasing the inequality between the rich and the poor. In Sweden, as much as 98% of the circulating money comes from private banks. When 98% of the money being circulated is profit-oriented, banks automatically prefer projects that can provide immediate cash returns, without taking long term sustainability into account. This is why Positiva Pengar believes in giving more power to the sovereign banks so the credit and money can be circulated better amongst the community, by fostering projects that are green and supporting local businesses .
Anders Langworth, the founder of Bankers for Climate (BFC), spoke about sustainable finance. He highlighted how the framework created by the BFC is crucial for governments and the general public to decide which banks are fostering sustainable innovation . BFC’s objective is to establish increased awareness by enabling bankers to inform colleagues, friends and family about the importance of the financial sector in fighting the climate crisis. As the banking sector has been predominantly tagged ‘complicated to understand’, by improving the dialogues and providing simplified information on investments placed by a bank, account holders can be aware of where they want to put their money. Another organization, 2 Degrees Investing initiative , aims to align the financial market with climate goals, by helping banks invest more in renewable energies and innovative solutions paving the way to a sustainable future. Climate risks will destabilize financial markets, hence aligning investments with climate and energy goals is of utmost importance.
A report by the ‘Rainforest Action Network’ known as the Banking on Climate 2020 was constantly referred to all through the webinar. The report states that a total of 35 banks have collectively invested USD 2.7 trillion in the fossil fuel industry since 2016 . While banks are slowly waking up to the severity of climate risks, major banks are still pretty slow in implementing climate policies. They are actively lobbying against government regulations that limit fossil fuel funding. The report further narrows down case studies from countries such as Poland and Argentina where the projects invested in (by some of the 35 mentioned banks in the report) have caused significant environmental and economic damage on communities living in the area.
However, all is not lost. Towards the end of the webinar, speakers from private investment companies and economists such as Steve Keen laid out the importance of revamping the banking and investment sector. Three common ground agreed upon by most keynote speakers and panelists were the following:
- The public sector, private sector and people of the community must collaborate, communicate and work together to build investment strategies that are transparent and aligned with United Nations Sustainable Development Goals and climate goals of the country.
- A major push must come from governments in terms of banking policies and bailout terms in case of a financial crisis. Credit unions and investment banks have been significantly less hurt in the financial crisis and are all the more encouraging towards local and sustainable businesses than big private banks. Such sustainable models must be incorporated in place of immediate profit-seeking mechanisms.
- Public awareness is important. By providing knowledge to the general public about the various pension options, investment opportunities and sustainability of banks, people can make an educated choice regarding where they want to put their money. Enough flexibility and opportunities should be provided so that individuals can ‘fire their fossil banks’ and choose to move to greener banks.
All in all, the conclusion was to increase conversation and debate on the topic of climate finance. Banking is a sector that is considered incredibly complicated, which is not true. Similar to everyday decisions we take to reduce our carbon footprint, we should also openly discuss and determine where we want to put our money. Choose sustainable banks. Choose sustainable investments.
 We Don't Have Time, [Online]. Available: https://www.wedonthavetime.org/.
 UNFCCC, "Introduction to Climate Finance," [Online]. Available: https://unfccc.int/topics/climate-finance/the-big-picture/introduction-to-climate-finance/introduction-to-climate-finance.
 Positive Money, "What is Money," [Online]. Available: https://www.youtube.com/watch?v=01IusDeSPE4&feature=youtu.be.
 Positiva Pengar, "What is money?," [Online]. Available: https://positivapengar.se/.
 Bankers for Climate, [Online]. Available: https://www.bankersforclimate.com/.
 2DII, “Aligning financial markets with climate goals” [Online] Available: https://2degrees-investing.org/
 Rainforest Action Network, "Fossil Fuel Finance Report," Banking on Climate Change, 2020.
Published on: 9.8.2020