Big Banks Pull Away from Dirty Businesses

by Jason Mark – August 31, 2010Follow Jason Mark on Twitter

Good News Shows Potential for Progress Outside of Washington

Today’s New York Times has a front page story delivering some sorely needed good news: Many of the world’s biggest banks — including giants like Wells Fargo, Bank of America, Credit Suisse, and HSBC — are voluntarily reducing their investments in environmentally destructive practices such as mountaintop removal coal mining and tar sands extraction in Canada.

Times reporter Tom Zeller Jr. writes:

“ … The rise of murkier issues like global warming, along with increasing scrutiny by environmental groups of banks’ investments in many other industries — like oil and gas development, nuclear power, coal-fired electricity generation, oil sands, fuel pipeline construction, dam building, forestry and even certain types of agriculture — are nudging lenders into new territory.

‘We’re taking a much closer look at a much broader variety of issues, not all of which are captured under state and local laws,’ said Stephanie Rico, a spokeswoman for the environmental affairs group at Wells Fargo.”

Some of the banks that shifted their policies have done so in response to pressure from the grassroots green group Rainforest Action Network (RAN). For years, RAN has waged direct action-oriented campaigns against Citigroup, BofA, and Wells Fargo as a way of cutting off the investment flowing to logging and fossil fuels. Instead of wrangling with the downstream effects of corporate policies, RAN has gone upstream, as it were, in an attempt to choke off the capital that fuels bad corporate behavior. By targeting the banks that finance environmental destruction, RAN has gone after the very jugular of Corporate America.

(Full disclosure: My longtime girlfriend, Nell Greenberg, is a communications manager at RAN.)

The Times article is a big deal, I think, because it suggests that the best way of winning environmental victories might be to go around Washington, DC and demand changes directly from the marketplace. As David Fahrenthold wrote in this Sunday’s Washington Post, the environmental movement is at something of a low water mark. Greens are 0-for-2 this year on major initiatives. The failure to get the Senate to pass comprehensive climate legislation was, of course, a serious defeat, as is the inability (so far) to see any improved environmental laws come out of the BP disaster. The environmental movement simply has not demonstrated the political muscle to push a sustainability agenda in Washington.

In all fairness, the challenges facing greens are shared by groups across the progressive spectrum. Washington is gripped by what Nation columnist Eric Alterman calls “a democratic dysfunction.” The Senate is all-but-hopeless. The capital media has become nothing more than a gaggle of palace whisperers. On its best days, the Republican opposition is brazenly cynical and dishonest; at its worst, the party is simply nihilistic. The capital has become, in the evocative phrasing of White House Chief of Staff Rahm Emanuel, “fucknutsville.”

It’s difficult to see how any progressive movement — even the strongest and most sophisticated — could achieve reforms in such an environment. Which is why there is a lot of wisdom in steering clear of the capital swamp and instead focusing energy on the corporations. Even the most thick-skinned companies, after all, are more sensitive about their images than your typical congressional back bencher, who knows he can rely on corrupt system for re-election. That’s the great irony of our broken politics: The corporate puppeteers are more worried about their brands than are the politicians they control.

This insight is the secret of RAN’s success. Yes, the group has directed a lot of energy at compelling the EPA to halt mountaintop removal coal mining, but the organization’s core strength is waging corporate campaigns that try to batter a company’s brand as a way of changing its mind. RAN appears to be winning by adhering to one of the first rules of good journalism: Follow the money.

Jason Mark, Editor, Earth Island Journal
Jason Mark is a writer-farmer with a deep background in environmental politics.  In addition to his work in the Earth Island Journal, his writings have appeared in the San Francisco Chronicle, The Nation, The Progressive, Utne Reader, Orion, Gastronomica, Grist.org, Alternet.org, E magazine, and Yes!  He is a co-author of Building the Green Economy: Success Stories from the Grassroots and also co-author with Kevin Danaher of Insurrection: Citizen Challenges to Corporate Power. When not writing and editing, he co-manages Alemany Farm, San Francisco’s largest food production site.

Email this post to a friend.

Write to the editor about this post.

View Posts by Date View Posts by Author