The Climate Change Committee is advised by banks – how can the public trust its findings on fossil fuels?
The climate column : The CCC published its sixth UK carbon budget at the end of 2020 and included a report on the financing of the transition to a zero-carbon economy. So why did it fail to mention the estimated $200bn that Shell and BP are planning in new fossil fuel projects? Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today. Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today. It is truly shocking that the banks who have been pouring billions into fossil fuel investments should dominate a committee advising the government on ending fossil fuel financing. And yet, perhaps we shouldnt be surprised. At the end of last year, the governments official advisers on climate action, the Climate Change Committee (CCC), published its sixth UK carbon budget . For the first time they included a report on the financing of the transition to a zero-carbon economy. The majority of the committee invited by the CCC to draft the report consisted of executives from major financial institutions, including HSBC, RBS, Aviva, Federated Hermes and Schroders. It beggars belief that the CCC should describe such executives as independent. In an astonishing act of self-congratulation, the committee praised the efforts by HSBC and RBS, as well as other UK banks, including Barclays and the oil corporations Shell and BP, for commitments to move towards net zero. They neglected to mention that Barclays, HSBC and RBS have been among the top banks in the world for funding new fossil fuel projects. Between them , Barclays, HSBC and RBS have invested a whopping $216bn in fossil fuels since the 2016 Paris Climate Agreement. We have written before about the greenwashing buried in the UK oil corporations so called net-zero proposals for 2050. The report also failed to mention the estimated $200bn that Shell and BP are planning in new fossil fuel projects over the coming decade. By ironic coincidence, the Financial Times reported the same week that numerous senior renewable-energy executives were leaving Shell, reportedly due to dismay at Shells refusal to move fast enough away from its lucrative fossil fuel operations. Do not get me wrong: it is hugely important that the CCC issue a report on how to finance the transition to a renewable energy economy. We have criticised them previously for not addressing the crucial role of the Bank of England and the UKs financial sector. And this report does include important recommendations on how the government could help mobilise the 50bn in zero carbon investments needed according to the CCC report by 2030. But they almost all focus on how to enable private sector investments to be more secure in order to reduce their costs. They estimate that if the investments are considered to be risky, financing costs paid to the private finance sector could devour up to nearly 30 per cent of the billions being invested annually in the green transition. The CCC says that the vast majority of the money to be invested should come from the private for-profit sector. But at a time of historic low interest rates, it seems ludicrous to exclude low-cost UK government investments from having a major role in the transition. One of the biggest problems with the report is that, while it went into significant detail on how to mobilise profitable finance for the green transition, it failed miserably on setting out the detail on how to immobilise the dirty current lucrative high-carbon and fossil fuel investments. $2.75tn has been invested in new fossil fuel projects by the global banks since Paris . Another $5tn was planned up to 2030, prior to the Covid-19 pandemic. If we do not halt these genocidal investments, then the investments in the green economy will just cancel out the ongoing expansion in fossil fuels, leading to irreversible climate catastrophe. But the report does set out one hugely important principle on immobilising new fossil fuel investments. It recommends that the government should make net-zero targets mandatory for the banks and regulating this must be part of the Bank of Englands core mandate. This is something this column has called for numerous times. The disastrous problem with the reports recommendation is that they set a target of net-zero financing for 2050. Thus, the banks would be free to continue investing & profiting from new fossil-fuel and high-carbon projects for another 30 years. This is totally in line with the utterly unacceptable declared net zero 2050 aims of the oil corporations and some banks. This would allow them to continue with a gradually declining destructive business-as-usual for decades to come. What the CCC should be calling for is an immediate ban on all new fossil fuel investments by the UKs banking institutions and for the UK to press for the inclusion of such a ban to be part of the COP26 declaration in Glasgow in 2021. The CCC must stop giving decision-making roles to executives from the fossil fuelled corporations. HSBC, RBS, Shell and Drax power station executives must be removed from such CCC roles. They are entitled to be official consultees but it is outrageous that the foxes are invited to oversee the rules for coop. On a positive note, the deputy chair of the CCC Lady Browne did divest her shares in BP , two weeks after this column exposed that she was a shareholder last July. The CCCs work is too important for the future safety of the British public and nature, to be repeatedly enmeshed in damaging unnecessary conflicts of interests. The CCC were approached for comment but did not reply. The CCC should appoint a brand-new committee on Delivering a Net Zero Finance Sector and include at least one representative each from civil society and the NGOs specialising in decarbonisation of the financial sector. That way the public can have trust in the crucial work the nation is dependent on it to deliver. Join thought-provoking conversations, follow other Independent readers and see their replies