Changing Finance to Stop Changing Climate
As wildfires continue to ravage California, floodwaters recede and reveal devastation in Louisiana, and much of the country recovers from the hottest summer on record, the case could not be clearer — climate change is happening, and it’s only going to get worse.
The science is undeniable, and as human-caused emissions continue to warm the planet at an alarming rate, it is our responsibility to reduce our contributions to the problem and make every effort to slow its effects. That’s why Amalgamated Bank is announcing a series of major policy steps regarding our own investment assets, operations, and lending portfolios that demonstrate the serious economic risk in climate change. Taking it one step further, we are calling on our colleagues at other banks to follow take similar steps to play a leading role in a cleaner, greener future.
Climate change is already spurring dramatic shifts in business: companies are turning to cleaner energy sources, recycling and “going paperless” are becoming commonplace in offices everywhere, and shareholders are increasingly demanding that companies address both the human and fiduciary risk of climate change. As evidenced by the United Nations’ Paris Climate agreement, governments around the world are embarking on sweeping policy changes in the coming years. With policy makers, industry and consumers stepping up to reduce carbon emissions, banks are in a unique position to support those climate solutions and stand with that leadership.
As fossil fuels become an increasingly risky and volatile investment, banks have a responsibility to their clients to protect them from that risk — and the best way to do this is by making investments in green policy solutions. We’re making it clear that global policy action, the carbon bubble and the impacts of a disrupted climate are real financial concerns which need to be addressed. Turning our attention to a low-carbon economy can simultaneously support the creation of a stronger economy and safeguard our customers’ wealth against the risks of the carbon bubble.
Amalgamated’s legacy and history of fighting for economic justice and equity goes hand in hand with the moral obligation to act aggressively on climate change. Along with the fight for $15 and paid family leave, Amalgamated Bank is proud to lead by example and support the advocates and policies that are right for the future.
We are already making strides in fulfilling this goal. We have worked with the Environmental Defense Fund to develop a plan where Amalgamated Bank will be carbon neutral by the end of 2017 and will be joining the RE100 Campaign of corporate leaders that are going to be 100% powered by renewable electricity sources. And our plan is to do it in a way that will support good quality jobs with an organized workforce.
As an industry that prides itself on innovation and bold action, we must all be leaders and take real action to change our course. Recently, we became the first US bank to sign on to the Divest/Invest Pledge — a gathering of nonprofit, investment and philanthropic leaders who recognize the growing need to separate our finances from industries which pose unnecessary risks.
Investment in portfolios that proactively address climate risk demonstrably produces returns comparable to those still including riskier, energy sources that will only become more expensive or off the table in a carbon constrained future. Executed thoughtfully, this strategy will safeguard assets against the ongoing policy shifts in energy and business, and can promote a fair and just economy for workers. A stable climate offers a stable environment for businesses to continue to grow and thrive; by offering our support to progressive and proactive clients and portfolios, banks will only be helping the economy to continue growing.
This transitional period is an opportunity for financial institutions to both honor their fiduciary obligations and address the growing financial uncertainty posed by the potential for stranded assets. As reliance on investments in carbon sources becomes increasingly untenable, banks have a chance to actively lead in supporting customers as they navigate the disruption caused by the adoption of a cleaner economy. The carbon bubble is a real concern for the financial health of both banks and their customers. Confronting that risk head on and across the full spectrum of a bank’s work, we can help create a stronger, more resilient economy.
Banks can be a force for positive impact, and should embrace the challenges of climate change as an opportunity to do right by their clients. Relying on fossil fuel investments to support our customers’ financial health is a risky game. Prioritizing carbon-neutral or carbon-positive investments in businesses with a demonstrated focus on cleaner operations — is a chance to expand our influence beyond our customers and serve a greater societal need.