Tomorrow (5 June) is World Environment Day, when the UN will attempt to draw our attention to the urgency of preventing catastrophic climate change. This isn’t a new message or battle so it’s no surprise that activist groups are already taking drastic action to force change on the dawdlers to the cause. Certainly their patience with oil majors’ slow progress has worn thin.
Woe betide any company which poses a threat to humans or the planet. There is only one thing you can do when the products and services you offer are in demand but are bad for us and our world, and that is transition to a better (healthier, cleaner, greener) alternative. After all, governments and regulators might be more understanding on timelines, but they too will be deploying their own tactics such as those used against the big tobacco firms for decades (taxes and health warnings). Germany has recently introduced a new National Emissions Trading Scheme that means millions of Germans must now pay more for their petrol and heating as the country tries to meet its emissions reduction targets. The sugar tax was introduced to force food producers to reformulate their unhealthiest recipes.
The targets and issues don’t stop at big oil. Banks and asset managers are being encouraged to accept responsibility for emissions enabled by their lending which tend to be much larger, in aggregate, than the emissions from their own operations. A report from the Carbon Disclosure Project in April showed these "financed emissions" were around 700 times greater than financial institutions' operational emissions. This issue of how banks cause climate change is something ShareAction – which exists solely to make investment a force for good – urges investors to focus on.