Sheila Brookes, Aidan Baker and Clare Baker from Cambridge WDM met Cambridge’s MP, Julian Huppert, on Saturday 6 July to discuss the financing of “dirty energy” projects (coal and oil extraction) by financial institutions in the City of London. The meeting took place at one of Julian’s regular constituency surgeries, held at Chesterton Methodist Church.
Aidan Baker started by presenting WDM’s case, which hinges on the desire for transparency about carbon emissions. The UK Government is bringing in mandatory carbon reporting, which essentially means that companies will need to make their carbon footprints publicly available. This is good news, but the current proposal doesn’t go far enough. In particular, banks will need to report the carbon emitted in their head offices – from lighting to executive travel – but, crucially, not, yet, emissions of projects they finance.
Many UK banks have invested huge sums in carbon intensive extraction projects in the Global South. Making them report emissions caused by these (so-called “Scope III emissions”) alongside their UK activity would shed light into some very murky financial practices. Furthermore, including Scope III emissions in mandatory carbon reporting would not itself need primary legislation; it is within the gift of the Business Secretary, Vince Cable. Our aim at this meeting was to ask Julian Huppert to write to his Liberal Democrat colleague with this request.
Julian explained that the main purpose behind carbon reporting was simply to gain a picture of the country’s emissions. He would like it to include everything that UK companies are responsible for, including aviation and shipping; the problem with adding Scope III emissions is mainly one of complexity. The banks do not own the companies whose emissions we seek to include, they merely invest in them or loan them money, and it would be difficult to include these emissions without ‘double counting’. Aidan agreed that this was a potential problem, but said that the banks needed to be accountable for the environmental damage of the projects they funded.
Aidan then handed over to Sheila Brookes to give an example. Sheila cited a large open-cast mine at Cerrejón, close to the North Atlantic coast of Colombia. Millions of tonnes of coal have been exported from this mine every year since the 1970s, mostly to the US, Canada and Europe and since 2009 the mine developers have received investments of over £7 billion from UK banks to fund its expansion. This has caused significant humanitarian problems as well as environmental damage. Whole communities have been displaced without receiving the compensation that was originally promised. The mining company is now planning to divert 26km of a river that is held sacred by indigenous communities, and these communities have not even benefited from energy produced from the mined coal: it is estimated that coal exports from the Cerrejón mine generate more emissions than the whole of Colombia.
Julian understood why we were concerned about this project, but pointed out that these concerns were clearly wider than was suggested by an emphasis on carbon emissions. He suggested that the serious problem of UK companies investing in such dodgy projects might be better addressed through campaigns such as ShareAction1 (formerly FairPensions), which promotes ethical investment by pension funds and their managers. Aidan agreed that this could be a useful approach, but said that the problem of the “network of power” linking government, the finance industry and the extraction industry was a complex one that needs be addressed in a number of ways. Opening up these activities to public scrutiny via mandatory carbon reporting would be a useful step that could be taken easily, and the UK government, having signed up to the EU’s Extractive Industries Transparency Initiative2, should be persuadable. Sheila added that all investment in extractive industries was investment lost from clean energy projects to benefit local communities.
Julian ended by repeating that he agreed with WDM’s aims although he was still dubious about whether simply adding numbers to reported carbon emissions was the most appropriate means to achieve them. If it could be argued that emissions were being counted more than once it might make the whole process seem less credible, which would be counter-productive. He did, however, agree to send a letter to Vince Cable on our behalf and to find out more about the Cerrejón mine.
Clare Baker
