The growing insistence on confusing finance and environmental protection is taking a chilling turn, and a new report proposes government regulation of the financial sector to stave off fossil fuel financing. Greenpeace Canada recently released a report entitled “What to do when Canadian banks quietly backtrack on their climate commitments” and stressed that “there is an urgent need for governments to step in and regulate the financial sector”.
20.4 percent of the funding allocated to fossil fuels by the world’s 60 largest banks in 2022 came from Canada’s five largest banks. That number has risen sharply from 13.8 percent in 2016. The Greenpeace report appears to be using this statistic as ammunition to justify its radical stance on financial sector regulation. Keith Stewart, Senior Energy Strategist at Greenpeace Canada stated:
“For the fossil fuel industry, government regulation is the only viable way forward.”
Banks are at the center of an escalating tug-of-war between fossil fuel interests and climate-focused organizations like Greenpeace. On the one hand, fossil fuel companies and their allies have launched a counteroffensive against environmental, social and governance (ESG) initiatives that directly impact their financial resources. On the other hand, organizations like Greenpeace argue that government intervention and regulation are now necessary to ensure banks adhere to ESG initiatives.
However, this poses a troubling question: Should the government have the power to determine where and how banks make their investments based on environmental criteria? And if so, where does this regulatory power end? It is a slippery road to controlling all financial transactions under the cloak of “environmental justice”. This prospect smacks worryingly of eco-fascism, in which state power is used to enforce strict environmental standards and regulations.
This report also points to “new political momentum for regulation” with “their polls” showing 70% of Canadians support regulation. Even elected officials seem enthusiastic about the idea. Liberal, NDP, Bloc and Green MPs have backed a new motion calling on the federal government to “use every legislative and regulatory tool at its disposal to align Canada’s financial system with the Paris Agreement.” That sounds less like democracy and more like a power grab under the cloak of environmental protection.
To quote Stewart again:
“Since bankers cannot or do not want to act alone, it is time for our elected officials to finally legislate and regulate banks so that they are part of the climate solution, and not an ever-increasing part of it.”
The essence of a free market, however, is that organizations can operate independently within the confines of the law. Isn’t the power of consumers to put their money where they want a fundamental right?
Encouraging financial institutions to consider the environment in their financing decisions is bad enough. Asking governments to legislate and regulate such decisions is quite another matter. If we’re not careful, we may trade the freedom of financial decision-making for a regime that exercises control over our economic activity, all in the name of “saving the planet.”
Charles Rotter is @crotter8 on Twitter