Tackling climate change means stopping the funding of rainforest destruction, says a significant study commissioned by the World Wildlife Fund. The UK's financial services have provided directly over £8.7 billion to 167 different traders, processors, and buyers of forest-risk commodities (cocoa, rubber, timber, soy, beef, palm oil, pulp & paper) from 2013 to 2021. With direct and indirect investment, the figure rises to a staggering £200 bn. Whilst not all that investment is in destructive projects, the study concludes there is little transparency on the risk.
Finance is the oil in the economic machine. But it also drives decisions. We all know the importance of money. We borrow to invest. So much depends on it, such as company pensions. Do we really know what our pension pots are doing? We invest for the future. But what kind of future? Is all investment good?
Much investment is bad. Investment drives the nature of our economy. It drives our decisions as individuals, as communities, as producers, and as consumers. Its power is all around for us to see.
The Tory Party in the UK has just had its Party conference. Its slogan is Build Back Better. There is no strategy, but the 'growth is good' mantra. It is an ongoing theme on The Thin End that growth is not good for the planet.
So, we need accountability, not least to stakeholders. Where and what is our money doing? There needs to be corporate responsibility for the environment and human rights. There also needs to be a legal framework for independent audits of the environmental impact assessment. Profit and loss accounting is not sufficient.
Laws tackling illegal deforestation are not enough, particularly when what is legal is even more destructive. Moreover, there are perhaps limitations on what individual governments can do in proscribing action in other countries.
However, the government could have specific laws controlling finance emanating from within its bounds or allowing companies to trade that are not transparent or are blatantly harming the environment. Companies registered, or trading in the UK should be made accountable for their investments and actions. Investment in environmentally harmful activity is culpability. We need to see that in the profit and loss columns. The cost is enormous. If we factored that in, most companies would see their profits shrink dramatically. Let us see the real cost of what we do, or what is done in our name, to feed, clothe, and keep us warm.
For decades we pumped out carbon from coal, gas, and oil. Now we worry about the consequences. Black gold is no longer good. Yet we go on trading as if that is not equally as harmful. Trade, trade, trade. The market cannot package and sell an ounce of clean air, an ounce of reduced carbon emissions. Yet, that has been the approach of international trade. Let someone else pay the true cost. The poor farmer struggling to make a living producing the crops that give us cheap food, scratching a living for a farthing to have cheap products on our shelves. We need to pay more. Let us see the real cost of what we do or what we consume.
And so back to finance that drives it all. Disclosure of investment should not be voluntary as if some form of a PR exercise. Shame alone is insufficient if companies have a choice over what they disclose. So, the laws in individual countries should be tougher on financial disclosure. Where's the money going, and what does it do to the planet?
Photo by Birger Strahl on Unsplash
Author: Ray Noble is a chartered biologist.
Build build build Trade trade trade !!!!! Very well put and at what cost? So sick of politicians pandering to our own collective greed for cheap cheap cheap!!!!
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