When we think about climate change and pollution, we usually think about oil-soaked birds, fossil gas platforms in the Arctic or black smoke rising above coal plants. We never think about banks, insurers and investors. But we should. Because money is a driving force beyond fossil fuel extraction and environmental destruction.
The most polluting sector on the planet is not fossil fuels. It's finance.
Sure, you've heard banks are increasingly putting money into green projects, and yes, they are financing green projects, but they are doing it on top of new polluting oil, coal and gas projects. I have been looking at the math for a decade, and it's still a green droplet in the ocean of pollution. I started to campaign to protect the environment and human rights when I was at university, and I cannot count how many times I've heard financiers telling me, "Sorry, we need coal." Sometimes they said, "We can make it clean." Mostly I've heard, "It's impossible. There is nothing we can do."
Rather than be discouraged, that gave me the strength to prove them wrong. But how does someone like me, with a small group of partners, take on the big banks and insurers? Well, we start by making smart demands. Then we incentivize action. And finally, we add a spoonful of blackmail that I like to think of as a friendly nudge.
(Laughter)
When we set out to solve the issues of the world, we might want too much at once. The end of poverty, a peaceful world, a healthy planet. But how do you climb an unscalable mountain one step after another? The most important thing is to identify the SMART demand. Smart as in S.M.A.R.T. Something that is specific, measurable, achievable, relevant and time-bound. Something that you can realistically achieve based on the resources you have, your target and the balance of power between you and your target. You don't want something that requires more than 12 to 18 months to achieve because you will lose momentum. Victory sells, defeat does not. However, you don't want your objective to be too easy, either, because if it's too easy, it's not likely to change anything in the way the system works. And we want the system to change. So you want your objective to be disruptive and transformative to bring you closer to your final goal.
For the past 10 years, my goal has always been the end of all financing of all fossil fuels. But back in 2013, even the idea that banks could automatically reject a whole sector of the economy appeared as crazy and was not open for discussion. So at that time, a smart objective was to convince one bank to withdraw from one project. And it didn’t take me long to come across one of the most insane projects: a huge coal mine that could open the way to eight other coal projects and destroy the Great Barrier Reef, a UNESCO site. This was Alpha Coal mine in Australia, supported by French bank Societe Generale. Our first SMART objective was to get this bank out of this project, and we succeeded after a year of relentless campaigning. Today --
(Applause)
Today, the coal of the Alpha Coal mine is still in the ground.
And from there, we moved on to our second objective. To get French banks to commit not to finance any of the projects located in the same basin of the Alpha Coal mine.
We succeeded, moved on to our third objective, to get French banks to commit not to finance any new coal mines, any new coal plants worldwide. We did one bank, two banks, three banks, four banks, until we convinced all French banks, the fourth-biggest banking sector worldwide, to reject all project financing for the coal sector.
(Applause)
And from there, we carry on until reaching our final goal: to get French financial institutions, not only the banks but also the insurers, investors, AXA and Amundi, to exit from the coal sector entirely. Not just say "no" to projects, but also to companies with existing coal operations. This goal seemed completely impossible a few years ago, and yet it's currently happening. Today, six trillion dollars of assets managed by French financial institutions are covered by a coal exit policy.
It helps if we think from the position of the person we try to convince. It will make my life a lot easier if my job was to convince every banker of the moral necessity to stop financing fossil fuels. But that's not my job. My job is to make sure they stop no matter the reasons. As campaigners, our first responsibility is to think who needs to be convinced, what kind of arguments are they likely to listen to the most. Bankers, insurers, these people don't live in a bubble. They have seen the fires and the floods of the past months, and as many of us, most of them are getting worried for themselves and for their kids. But the world is driven by digits, ruled by a system that demands profits.
So when I meet with the head of investment of a big financial institution, I don't bang on the table and say, "Our planet is on fire," which it is. I say, "Have you thought about your long term risk profile? The project that your client is developing might be forced to close down because of a new climate regulation or because a green alternative has become cheaper. Not only you might not profit from it, but you might actually lose money."
Bankers and financial institutions are slowly realizing that this climate issue is something they need to care about. If they don't deal with it, climate change will deal with them.
(Applause)
Yet even the argument of the financial risk doesn't always hit the mark. But there is one argument which is stronger than any other: the reputational risk. Financial institutions spend millions and millions to appear as green as possible, and they would not want that good PR money to go to waste. A good reputation takes years to build, but it can be lost in a week. And we can use that to our advantage. If you don't do the right thing and have your dirty financing revealed, you might lose clients, current employees, new talents. Where will your next generation of employees come from if people feel embarrassed to come work for you?
Once I wrote a report about a big French bank's hypocrisy on climate. This bank had stopped financing coal mines and claimed it was for climate reasons. But the same bank was actively supporting the building of new coal plants. What a hypocritical stand, right? So I wrote the report, but I didn't publish it straight away. Instead, I sent it to the bank and gave them two options. Either I can throw the report away, or I could send it to the press, depending on the bank's decision to meet my demands after a specific deadline and stop financing coal plants on top of new coal mines.
(Laughter and applause)
It's not a ransom, not a trap. Just a friendly nudge. I'm only here to help. As long as the bank is ready to consider my demands and give it a try.
(Laughter and applause)
We help by providing information and data, sometimes better than private data providers. And we are not just here to mourn and criticize. When things are headed in the right direction, we are all supportive. And when finally, financial institutions publicly commit to withdraw from a polluting sector, we celebrate.
In less than 10 years, 25 global financial institutions are phasing out coal financing for good. In 2017, AXA was the first insurer to stop insuring new coal projects and stop investing in companies that developed new coal plants. In 2019, Crédit Agricole became the first global bank to adopt a comprehensive coal exit policy. Step by step, we are climbing this unscalable mountain, and it's working. Today, coal companies are struggling to secure the financing and the coverage needed for their operations. Today, the small group of people has become a much bigger crowd, and these people are taking on European, American and Asian financial institutions. It's no longer only about coal, but also about oil and gas. To decarbonize finance, to solve the climate issues is not just about voting with your wallet and moving your money to an ethical bank. It's about joining these people and marching through the front doors of big banks and insurers to demand the impossible.
Thank you.
(Applause)
