Green or greedy? How the financial sector could save the planet

How corporations hide their environmental impact and how investors can hold them to account.

Giant multinational corporations have a bad name when it comes to the environment. While they would prefer us to remember their "responsibility" schemes, those of us with more than half an eye on the news are more likely to think of coal-fired power stations, oil-funded "scientists" and government lobbying. Yet when it comes to climate change, it is remarkable how little we know about what the world's largest companies are doing.

Less than half of Europe's 300 largest companies actually disclose complete verified data on their greenhouse-gas emissions, according to areport released this week by the UK-based independent non-profit research body the Environmental Investment Organisation (EIO). Moreover, over one in ten gives no information at all.

While the general trend is to greater corporate transparency, it is clear that there is a great deal of work to be done. The EIO hopes that by publicly ranking companies by their emissions and transparency, it will put pressure on the worst offending corporate giants.

However, public awareness alone is unlikely to make corporations clean up their act. Despite the hard work and success of groups such as Greenpeace and Friends of the Earth, we are still pumping greenhouse gases into the atmosphere at a rate that, if continued, will bring untold harm to society.

Co-ordinate your response

This is where the financial sector could help save the day. Time after time, governments fail to reach binding international agreements on emissions. Moreoever, even if all the relevant countries met the targets set by the (non-binding) Copenhagen Accord, this would still imply a dangerous temperature rise of between 2.5° and 5°C before the end of the century.

If governments cannot take the rapid action we need to avoid dangerous climate change, a co-ordinated private-sector response is needed. What better way to do this than through stock markets, operating across borders and without the need for lethargic governmental mandate?

Much of what the world's listed companies do is controlled ultimately by the stock market and those who invest in it. These companies also produce many of the environmentally damaging goods and services we consume. The EIO is aiming to use its emissions rankings to create new types of financial products that harness the western model of shareholder capitalism to drive emissions reductions.

The idea is simple: subtly modify where large, mainstream investors put their money to alter the supply and demand for different companies' shares according to their carbon emissions. The EIO's forthcoming Environmental Tracking Index series will be based on a conventional index fund, tracking stock-market performance to attract enough investors, but reweighted according to each company's emissions and transparency to give it clear incentives to reduce its footprint and be open to public scrutiny.

If the past 25 years have taught us anything, it is the power of financial markets. To many, particularly on the left, this is reason enough to distrust them. However, given that they exist, we can use them to our advantage, to hold corporations to account and build a greener, more open society.

We need to take hold of whatever resources are available to refashion our present, unsustainable means of production. The tools we need are right before our eyes.

Oliver Willmott is an analyst at the Environmental Investment Organisation and co-author of the ET Europe 300 Carbon Rankings Report 2011.

Photo: Getty
Show Hide image

How the row over Jackie Walker triggered a full-blown war in Momentum

Jon Lansman, the organisation's founder, is coming under attack. 

The battle for control within Momentum, which has been brewing for some time, has begun in earnest.

In a sign of the growing unrest within the organisation – established as the continuation of Jeremy Corbyn’s first successful leadership bid, and instrumental in delivering in his re-election -  a critical pamphlet by the Alliance for Workers’ Liberty (AWL), a Trotskyite grouping, has made its way into the pages of the Times, with the “unelected” chiefs of Momentum slated for turning the organisation into a “bland blur”.

The issue of contention: between those who see Momentum as an organisation to engage new members of the Labour party, who have been motivated by Jeremy Corbyn but are not yet Corbynites.

One trade unionist from that tendency described what they see the problem as like this: “you have people who have joined to vote for Jeremy, they’re going to meetings, but they’re voting for the Progress candidates in selections, they’re voting for Eddie Izzard [who stood as an independent but Corbynsceptic candidate] in the NEC”.  

On the other are those who see a fightback by Labour’s right and centre as inevitable, and who are trying to actively create a party within a party for what they see as an inevitable purge. One activist of that opinion wryly described Momentum as “Noah’s Ark”.

For both sides, Momentum, now financially stable thanks to its membership, which now stands at over 20,000, is a great prize. And in the firing line for those who want to turn Momentum into a parallel line is Jon Lansman, the organisation’s founder.

Lansman, who came into politics as an aide to Tony Benn, is a figure of suspicion on parts of the broad left due to his decades-long commitment to the Labour party. His major opposition within Momentum and on its ruling executive comes from the AWL.

The removal of Jackie Walker as a vice-chair of Momentum after she said that Holocaust Memorial Day belittled victims of other genocides has boosted the AWL, although the AWL's Jill Mountford, who sits on Momentum's ruling executive, voted to remove Walker as vice-chair. (Walker remains on the NEC, as she has been elected by members). But despite that, the AWL, who have been critical of the process whereby Walker lost her post, have felt the benefit across the country.

Why? Because that battle has triggered a series of serious splits, not only in Momentum’s executive but its grassroots. A raft of local groups have thrown out the local leadership, mostly veterans of Corbyn’s campaign for the leadership, for what the friend of one defeated representative described as “people who believe the Canary [a pro-Corbyn politics website that is regularly accused of indulging and promoting conspiracy theories]”.

In a further series of reverses for the Lansmanite caucus, the North West, a Momentum stronghold since the organisation was founded just under a year ago, is slipping away from old allies of Lansman and towards the “new” left. As one insider put it, the transition is from longstanding members towards people who had been kicked out in the late 1980s and early 1990s by Neil Kinnock. The constituency party of Wallasey in particular is giving senior figures in Momentum headaches just as it is their opponents on the right of the party, with one lamenting that they have “lost control” of the group.

It now means that planned changes to Momentum’s structure, which the leadership had hoped to be rubberstamped by members, now face a fraught path to passage.

Adding to the organisation’s difficulties is the expected capture of James Schneider by the leader’s office. Schneider, who appears widely on television and radio as the public face of Momentum and is well-liked by journalists, has an offer on the table to join Jeremy Corbyn’s team at Westminster as a junior to Seumas Milne.

The move, while a coup for Corbyn, is one that Momentum – and some of Corbyn’s allies in the trade union movement – are keen to resist. Taking a job in the leader’s office would reduce still further the numbers of TV-friendly loyalists who can go on the airwaves and defend the leadership. There is frustration among the leader’s office that as well as Diane Abbott and John McDonnell, who are both considered to be both polished media performers and loyalists, TV bookers turn to Ken Livingstone, who is retired and unreliable, and Paul Mason, about whom opinions are divided within Momentum. Some regard Mason as a box office performer who needs a bigger role, others as a liability.

But all are agreed that Schneider’s expected departure will weaken the media presence of Corbyn loyalists and also damage Momentum. Schneider has spent much of his time not wrangling journalists but mediating in local branches and is regarded as instrumental in the places “where Momentum is working well” in the words of one trade unionist. (Cornwall is regarded as a particular example of what the organisation should be aiming towards)

It comes at a time when Momentum’s leadership is keen to focus both on its external campaigns but the struggle for control in the Labour party. Although Corbyn has never been stronger within the party, no Corbynite candidate has yet prevailed in a by-election, with the lack of available candidates at a council level regarded as part of the problem. Councilors face mandatory reselection as a matter of course, and the hope is that a bumper crop of pro-Corbyn local politicians will go on to form the bulk of the talent pool for vacant seats in future by-elections and in marginal seats at the general election.

But at present, a draining internal battle is sapping Momentum of much of its vitality. But Lansman retains two trump cards. The first is that as well as being the founder of the organisation, he is its de facto owner: the data from Jeremy Corbyn’s leadership campaigns, without which much of the organisation could not properly run, is owned by a limited company of which he is sole director. But “rolling it up and starting again” is very much the nuclear option, that would further delay the left’s hopes of consolidating its power base in the party.

The second trump card, however, is the tribalism of many of the key players at a local level, who will resist infiltration by groups to Labour’s left just as fiercely as many on the right. As one veteran of both Corbyn’s campaigns reflected: “If those who have spent 20 years attacking our party think they have waiting allies in the left of Labour, they are woefully mistaken”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.