Climate change at the Edinburgh Festivals

Greta Thumberg cancelled her Edinburgh appearance earlier this month - because Book Festival sponsor Baillie Gifford invests in fossil fuels. There was also a walkout by other writers and audience members who said it is not enough to meet and talk about climate change - we need to stop funding the types of activities that make it worse.

Writing on Substack, columnist Alex Massie dismissed the action: “Thumberg was responding to a report - to dignify it with a status it scarcely merited - from a Gradgrind collective of leftists which discovered, by means of looking at Baillie Gifford’s annual report, that: ‘Two percent of Baillie Gifford’s total investments were in companies which make at least five percent of their money from the oil or gas industries… By any reasonable estimation, this is a tiny portion of a £225bn portfolio. Two percent! In companies which make “at least five percent” of their profits from oil and gas! Pass all the smelling salts and clutch all the pearls.”

Massie added that most pension funds are probably more heavily into fossil fuels than Baillie Gifford. He does have a point. How many ordinary citizens are putting away money each month into funds that are damaging the planet in even worse ways? How can we know what our money is being used for?

Fossil fuels are very lucrative investments of course. It takes millions of years to create a gallon of petrol and then we send it up in smoke for a few hours of power - a lot of bang for your buck. The fuel is valued highly by the markets - though not the greenhouse gas emissions that are left behind. Pension funds are invested to make profits - and fossil fuels do that. The fund holders want to make as much as they can for their old age. That is understandable.

But we are now all much more aware of the complacency of investors of the past - people who looked the other way as they blithely spent cash raised from the horrific opression of slaves. Another story I read this week was about William Gladstone - researchers revealed that his early career was funded from the profits of slavery.

It seems astonishing to us now that people like Gladstone, a great Victorian moralist, could have been so hypocritical. But will our descendants look similarly askance at us - as we take time to sort the recycling but remain in willful ignorance about what those pension savings are being used for?

One of the biggest challenges the climate catastrophe is creating is the mass movement of people. Climate deterioration, drought, famine, scarcity play a part in a growing number of global emergencies and can underlie or exacerbate wars and ethnic conflicts.

“Climate change [is] now found to be the key factor accelerating all other drivers of forced displacement. Most of the people affected will remain in their own countries. They will be internally displaced. But if they cross a border, they will not be considered refugees. These persons are not truly migrants, in the sense that they did not move voluntarily. As forcibly displaced not covered by the refugee protection regime, they find themselves in a legal void.”

— António Guterres, UN Secretary-General, former UN High Commissioner for Refugees

Many of those who denigrate and deny help to desperate people arriving in small boats - like wealthy Rishi Sunak - are also funding activities that will give millions no choice but to flee lands rendered uninhabitable by desertification and flooding. These modern-day Gladstones act as if they are the moral superiors of people whose lives they have helped to destroy.

At the moment, the main route people have to make sure their money is not being poured into planet-killing projects is to look for ethical funds managed using ESG - Environmental, Social, and Governance. That is the name given to the mark that says investment is ethical.

Does ESG work? I recently read a book called ‘The Big Con’. Essentially, authors Mariana Mazzucato and Rosie Collington argue not. There are no agreed ESG metrics so, they say, it is very easy for a particular company to shop around and pick the type, generally offered by a Big 4 consulting group, which best fits with its existing operation. For them, ESG is effectively creating a big optical illusion - the notion that the market can be trusted to deal with this and there is really no need for state regulation.

The Big Con authors argue that the rise of ESG has been used to hold off meaningful intervention by democratically-elected governments.

The Financial Times recently also carried a hard-hitting attack on ESG. Columnist Stuart Kirk argued that the idea of ESG is incoherent. There are too many things bound up in the same label - he gave the example of Meta, which is fine on the environment but terrible on S and G. There are also issues with the idea of markets trying to regulate public policy.

”Take Monday’s announcement by the UK government confirming hundreds of new North Sea oil and gas licences. Whether for reasons of energy security or political expedience, the move now directly contradicts the fossil fuel policies of many banks. European lenders in particular have gone blue in the face trying to reconcile being green with making money... Now these banks will miss a bonanza. They are also at odds with a democratically mandated decision.”

A letter in response from John Hay said that the banks show no sign of reneging on their promises to fit in with the UK government’s shift - and even if they do “it would do nothing to invalidate concern about fossil fuel expansion”. He argued that evaluating ESG on investments is “difficult and imperfect but necessary.”

In democracies, however, surely the governments we elect are in the strongest position to make real and lasting change? It should not be up to individuals or their pension advisors to have to sort their way through lots of confusing and sometimes misleading information, with no enforceable and agreed metrics. Governments working together to regulate the production of greenhouse gases is our planet’s best, perhaps only, only hope. To get there, we need these issues to be in the spotlight. More power to your elbow, Greta.

Further reading

Climate refugees

Photo Rob Bruce