World Bank and World’s Third Largest Insurer Divest from Most Oil and Gas
“The fact that they are making this commitment, to not be financing upstream oil and gas after 2019 is a pretty strong vote of non-confidence in the future of the oil and gas industry,” says Alex Speers-Roesch of Greenpeace Canada
DIMITRI LASCARIS: This is Dimitri Lascaris for The Real News Network. The Real News is in its fundraising season again and as a not-for-profit and viewer-supported news organization, we depend on you, our viewers, to provide independent news coverage. We’ve been prioritizing reporting on the global climate emergency by establishing a new climate crisis bureau. We ask you that you help us to achieve our critical objective of being a leading source of information on the climate crisis by donating to The Real News, which you can easily do by visiting our website.
Today, we’re going to talk about two important announcements relating to fossil fuels divestment. The World Bank and the world’s third largest insurer, AXA, just announced significant divestment initiatives. AXA announced it will divest from coal, tar sands and tar sands pipelines. Tar sands have been called the dirtiest oil on the planet and leading scientists have opined that if all of the tar sands were exploited, it would be game over for the climate. Meanwhile, the World Bank just announced that it will divest from upstream oil and gas.
Joining us to discuss the significance of these two announcements, we are joined by Alex Speers-Roesch, a climate and energy campaigner with Greenpeace Canada. Alex has many years of experience campaigning for climate action and the just transition to renewable energy. He currently helps to lead Greenpeace’s campaign to defund tar sands pipelines and he joins us today from Toronto. Thanks for coming back on The Real News, Alex.
ALEX SPEERS-ROESCH: Thanks for having me.
DIMITRI LASCARIS: Let’s start by examining the World Bank announcement. As I mentioned, the World Bank statement says that the World Bank Group will no longer finance “upstream oil and gas.” This is to occur after 2019, according to the announcement and the announcement also says that in exceptional circumstances there may be investment, notwithstanding this divestment initiative in upstream oil and gas projects in extremely poor countries. Given the parameters of this announcement, how important is it from a fossil fuels divestment perspective?
ALEX SPEERS-ROESCH: I would say it’s quite significant. The World Bank is one of the most influential, it’s a very influential global financial institution and the fact that they are making this statement, this commitment to not be financing or supporting upstream oil and gas after 2019 is a pretty strong vote of non-confidence in the future of the oil and gas industry, and significant recognition that investing in these kinds of projects doesn’t really support development goals and actually undermines them. We’ll have to see how they actually implement this promise and this commitment and a lot will depend on the details but at that very high level, it’s a very significant commitment and quite a positive one.
DIMITRI LASCARIS: What is upstream oil and gas? How important is that in the overall infrastructure of the fossil fuels industry and to what degree is the World Bank currently invested in upstream oil and gas?
ALEX SPEERS-ROESCH: Yes, upstream oil and gas generally covers exploration and production as distinct from midstream, which is sort of more the transport side and the downstream, which is refining and selling the refined products. It’s a big component of the oil and gas sector and it’s one of the sectors that has some of the biggest environmental impact that a lot of the fights around oil and gas projects deal with upstream oil and gas projects. Those are open pit mines of the tar sands, drilling in the Arctic Ocean, lots of projects like that.
So, it is very significant. I can’t speak to exactly what the World Bank’s exposure is to that sector but it’s, because of their mandate as a development organization, supposedly they’re there to support development, the fact that they are saying that they won’t touch these projects at all makes a strong statement about what they think the relationship is between… and development goals and that they don’t go together and that they are contrary objectives.
DIMITRI LASCARIS: Let’s break down the announcement by AXA. Tell us a little bit about AXA and its importance in the financial industry. What is committing to do and how important is its announcement?
ALEX SPEERS-ROESCH: AXA is the third largest insurer in the world. It’s a major financial institution, and they have basically committed to divest from a wide range, well increase their level of coal divestment and to divest from oil sands and to stop insuring these projects. It’s a very significant move from them because they’re a very big insurer and they manage a lot of assets, so they have a lot of money that they control. But it’s also very significant for the reasons that they’ve done this. What they have said is that in a four degree world, their business won’t operate, that the world will be uninsurable and so it’s a recognition, and it’s a positive growing recognition from some of the leading institutions of the global economy that climate change poses a serious threat to the global economy and to global stability.
This move will send a strong message to the rest of the financial sector. We’re seeing growing recognition from financial institutions of these realities and that investments in these kinds of projects are bad investments, not only from an environmental perspective and in terms of the social consequences but just from a straight-up business perspective. The AXA announcement came shortly after similar announcements from a number of other French banks, Natixis, Société Générale and Crédit Agricole. And this builds on other announcements that have come earlier this year where they’re saying that they won’t touch these kinds of projects because of their incompatibility with climate objectives and human rights objectives.
DIMITRI LASCARIS: Let’s talk about the Canadian financial industry. Major Canadian financial institutions continue to finance tar sands. Who are the major players in terms of financing the tar sands in Canada and have we seen any large financial institutions in this country, willingness on their part to pursue policies that are responsible from a climate crisis perspective and particularly by refusing to finance tar sands projects?
ALEX SPEERS-ROESCH: Yeah. The contrast between what the Canadian financial sector is doing and what we’re seeing from these French financial institutions is pretty striking and pretty disturbing. All the big Canadian banks are involved in financing tar sands and tar sands pipelines. One of the leaders, though, is Toronto Dominion Bank, and Greenpeace has actually been carrying out a campaign against Toronto Dominion for the past year and there’s a wide range of other groups that are concerned about tar sands expansion and tar sands pipelines that have also been campaigning against TD. Despite a lot of their branding themselves as a green bank and a more socially responsible bank, they are one of the leading financiers of all the tar sands pipelines that have been proposed and tar sands projects in general.
They have generally been silent on the issue or stood by their decisions and it is a pretty striking contrast. We’re seeing a lot of financial institutions elsewhere recognize that projects like tar sands pipelines are incompatible with the goals of the Paris Agreement but meanwhile we’re seeing banks like TD sort of double down and stick by them and contribute hundreds of millions of dollars in credit to helping them get built.
A pretty unfortunate thing as well is even some institutions that people might think of as more progressive in Canada, so Desjardins in particular, Desjardins Group. This is North America’s largest co-op federation, a major financial institution in Quebec. They have also been supporting pipeline financing and they contributed $145 million to the Kinder Morgan Pipeline out west or $145 million in credit. They did make some positive, or potentially positive steps earlier this year. Greenpeace, we met with them to raise some of these concerns about what they were doing and in response they launched a moratorium on all their oil pipeline financing investments, which was a very positive step.
It was a temporary moratorium, though, while they made longer-term decisions about what they were going to do. We had been engaging with them to try to make that moratorium permanent and adopt better standards to make sure that their lending and investment practices were consistent with the goals of the Paris Agreement and broader human rights standards. Unfortunately, they just recently announced that they are going back on their moratorium, that they will continue financing the Kinder Morgan Pipeline. And while they have made some sort of broader, vaguer commitments, they’re not strong enough to make sure that they will be avoiding these sort of bad projects. So, the contrast is pretty striking and that’s one of the key areas that we’re going to be working on going forward, is trying to push Canadian financial institutions to improve their practices, to stop supporting these bad projects and to live up to some of the better standards that have been set by other financial institutions.
DIMITRI LASCARIS: Let’s talk about the Trudeau government. It continues to support the tar sands industry by, for example, approving the massive expansion of the Kinder Morgan Trans Mountain Pipeline, which you just mentioned. Do you think these major divestment initiatives by foreign institutions and transnational institutions is going to increase pressure on the Trudeau government to at least water down, if not depart entirely from its pro-tar sands agenda?
ALEX SPEERS-ROESCH: I think it will definitely increase the pressure. I have to say I’m not super optimistic right now. We need significantly more pressure to really move the Trudeau government. They have staked a lot of their political capital on putting forward a climate policy and presenting themselves as taking the climate crisis seriously and working to address it. And while they have taken some steps which have been positive, there is a very striking contradiction in their overall approach, in that, as you said, while they are supporting some action on climate change, they are also very strong supporters of the Kinder Morgan Trans Mountain Pipeline and other tar sands pipelines, which as these financial institutions are recognizing, are incompatible with the goals of the Paris Agreement.
It really undermines the credibility of the Trudeau government on climate issues that, while on the one hand they are supporting things like reducing coal use or supporting the Paris Agreement, at home they are supporting activities which undermine those things and make it impossible to achieve those objectives. We saw that very strikingly recently, where the Trudeau government spoke out in support of Kinder Morgan to have the NEB basically be able to step in to remove local laws or clear the path in terms of local laws for Kinder Morgan so that they can proceed with construction because this has been an ongoing issue in British Columbia. Local municipalities felt that Kinder Morgan wasn’t following the laws properly. The NEB, while they had put a condition on Kinder Morgan that they had to follow the local laws because of this conflict they’ve lifted that condition basically, and the Trudeau government sided with Kinder Morgan.
So, we’re seeing the government flex their muscle to intervene on behalf of these pipelines, to support these projects that undermine the goals of the Paris Agreement. It will increase the pressure on them because you’re seeing more high-profile individuals and institutions recognizing this contradiction and taking action on it, but I think that we will need to see a lot more people speaking out a lot more loudly and putting a lot more pressure on the government before they will break and do the right thing and stop supporting these pipelines.
DIMITRI LASCARIS: This has been Dimitri Lascaris speaking to Alex Speers-Roesch of the Greenpeace Canada about two major fossil fuel divestment announcements. Thank you very much for joining us today, Alex.
ALEX SPEERS-ROESCH: Thanks for having me, Dimitri.
DIMITRI LASCARIS: And this is Dimitri Lascaris for The Real News Network.