What the EU is doing to make our money more ethical and why you should care

In case you haven’t followed what is happening in the European Parliament too closely this week, the EU just took a huge step towards making its financial system far more ethical and green.

© European Union, Parliament/Pietro Naj-Oleari

Global Witness has spent over 6 years exposing the role of EU-based investors in projects which have devastating consequences for communities and the environment. In a historic vote on Monday, Members of the European Parliament (MEPs) voted for EU investors to be required to identify, and then take action to mitigate environmental, social and governance risks when making investments.

Now you may ask, what on earth does this mean?

When companies look for land to build palm oil plantations abroad, or when they want to drill for oil or minerals, they rely on investment from European banks to be able to roll out these projects. The same European banks we put our money into. So far, weak regulations have let banks and other investors turn a blind eye to where their money is going.

However, on Monday MEPs voted to ensure that these investments now have to be more transparent regarding the environmental and ethical risks they pose. Additionally, investors themselves will now have to take action to ensure that our money does not cause harm to people and planet here in Europe or around the world. This is not only relevant for bankers in suits. It’s important for all of us: these new rules prevent our money from being used to drive devastating deforestation or human rights abuses abroad.

This is a big deal.

In the last few years, we have exposed how EU-based financiers have supported oil exploration in Africa’s oldest national park, bankrolled a mining project in India which sparked violent protests, and driven deforestation and land grabbing across Asia and Africa.

So, what’s next?

The job is definitely not done yet — we now need to influence the 28 EU member state governments to support this initiative and ensure the financial sector is transparent and accountable.

We know money travels faster and speaks louder than people — but we believe in people power. We will keep watching and exposing when EU money is leading to families being forced off their land or financing oil projects that destroy our planet — inadvertently or otherwise. And building on this political momentum, we will campaign to change these broken systems.

Follow us on Twitter @Global_Witness for more updates on our EU campaigns.

Author: Rachel Owens, Head of Global Witness’ EU Advocacy.

Global Witness is an international investigative organisation that exposes corruption, human rights and environmental abuses around the world.