Can the little guy really take on fossil fuel?
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Can the little guy really take on fossil fuel?

Strong collective-action campaigns might hurt some banks' reputations, but they will do little to convince those institutions to change their energy policies.


If a group of customers suddenly decides to stop shopping at their local fishmonger to protest the sale of an endangered species of salmon, the shop-owner may be inclined to reconsider her supplier. But if that fishmonger is also the owner of a multi-billion-dollar seafood packaging business, the financial consequences of such a public protest would probably be less dramatic.

Therein lies the reality for anyone considering collective action against fossil fuel-financing banks today.

Make My Money Matter (MMMM), a non-profit organization co-founded by film director Richard Curtis and Jo Corlett, a former special adviser to Number 10, is campaigning to raise consumer awareness about how pensions and bank accounts are linked to climate change – and how consumers could be part of the solution.

“The big five UK high-street banks are in a dangerous relationship with the fossil-fuel industry, but most of us don’t know that our banks could be causing climate change,” the organization writes on its website.

MMMM’s demands are threefold. The campaign is asking banks to stop the direct financing of fossil fuel expansion projects – which HSBC and Lloyds announced they would do late last year – as well as to put clients on notice that they must stop expansion activity. It also wants banks to cease all corporate finance to clients that continue to expand.

But these types of campaigns may not be the most effective way for collective activism to influence banks, especially when the aim is to change fossil fuel investment policies. Although retail banking provides an important asset base for banks, the material impact of consumer action on a bank’s decision-making towards a specific sector or industry is debatable.

Revenue streams

The idea behind collective action is that individuals, when working together towards a common goal, will wield enough influence over their bank to force change. But the reality is that retail customers may struggle to generate the financial clout needed to influence a financial institution that has multiple revenue streams.

Take Barclays, one of the largest banks in the UK and a firm that has come under fire from civil society groups for what they argue are loopholes in its coal exclusion policy and its continued funding of upstream oil and gas exploration.

During the first nine months of 2022, Barclays reported total income of £19.2 billion. Of that, the UK retail banking business accounted for only £4.1 billion, some 22%. The corporate and investment bank, by contrast, clocked up £10.8 billion.

It is hard to estimate what percentage of retail customers switching providers for ethical reasons would effect a change of course at a bank

Of course, the value of a bank’s retail customer base isn’t just the income they generate but also their role as providers of deposits. On September 30, 2022, Barclays’ UK retail customer deposits of £197 billion represented some 34% of group deposits.

And then there is the reputational issue, which can be explosive.

HSBC, another of the big five, has faced a series of controversies including a Bureau of Investigative Journalism report that linked its green finance capital allocation to fossil fuels, and a now-infamous presentation made by its former global head of responsible investing, Stuart Kirk, who left the bank shortly after and now writes about investing for the Financial Times.

Clearly, the public is focusing intensely on banks and their commitments to the fossil-fuel industry. Their harshest critics might be their own retail customers. But are banks really likely to change course because of this?

Materiality goes both ways

It is hard to estimate what percentage of retail customers switching providers for ethical reasons would effect a change of course at a bank. In August 2021, global consultancy firm Kearney released a survey that claimed that 22% of UK customers would likely switch to a bank with higher environmental, social and governance priorities, and that those aged 18 to 24 were almost twice as likely to switch banks as those aged 55 and over.

Surveys like that feed collective-action campaigns, but they also distract from the fact that there is no real-world example showing that such a protest can be effective in achieving its aims. This suggests that either there is a gap between what customers say they will do and what they actually do, or that they are satisfied with whatever sustainability progress their bank says it has made.

Film director Richard Curtis. Photo: Reuters

The principle on which campaigns such as MMMM are based – that the banking sector is still funding fossil fuel expansion, which goes against their climate-change commitments, and that we as customers of those banks are partly responsible for enabling that – is a logical one.

But if the point is to make banks more responsible, campaigners must find the most effective way to drive an industry-level shift towards sustainability.

It is not impossible to imagine that sudden, mass consumer action could hurt banks. But campaigns that focus on individual responsibility may be diverting attention away from more effective actions for sector-specific strategy change.

Regulators and public policy bodies need to create punitive measures that will force banks to deliver transition pathways, set interim emissions-reduction targets by sector, and make capital commitments to green investments binding. Only then can anyone expect to hold the industry accountable for its pledges to the 1.5-degree scenario and net zero.

Individuals have a role to play by calling for public policy changes and using their consumer power to incentivise ethical goods and services.

The Fossil Fuel Non-Proliferation Treaty, for example, is a campaign that has been endorsed by nearly 600,000 people, 70 cities and regional governments, 1,800 civil society organizations and 3,000 scientists and academics.

It is working on a legal pathway to end the expansion of oil and gas, while respecting the principles of a Just Transition.

Banks are often criticised for not delivering a material impact from their climate strategies, but the same can be said about many environmental campaigns and calls for collective action. Barclays won't decide to exclude oil and gas exploration from its financing businesses just because the director of Four Weddings and a Funeral is banging his fist on the table.

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