It’s show & tell time at COP27. Are the big guns wimping out on commitments?
There’s an air of depressingly little anticipation about the forthcoming COP27 global climate conference at Sharm El Sheikh this year. The cliff-hanger from COP26 in Glasgow was whether the raft of commitments made towards net zero targets in the Race to Zero would be followed through and extended this year to close the gap on 1.5 degrees. That will-they-won’t-they question may have been resolved tacitly by the dominance of global conflicts, energy inflation and the cost of living crises.
There’s a trend emerging, defined by those choosing not show up. Whilst some world leaders have U-turns before agreeing to attend, many of the big banking and finance CEOs aren’t. There’s a sense that whilst they may feel they have enough on their plates right now, it’s more about bottling out of the tough decisions their commitments were predicated on. Like the student who didn’t do their homework, they’d rather skip class than risk embarrassment in front of peers. Last year, there was a sense of solidarity emerging from the shadows of a global pandemic, bringing together broad coalitions to make shared commitments to act. This year, it’s show-and-tell time, and far too many are wussing out and hoping that the busy news cycle will distract everyone from noticing. And it’s not necessarily about turning up in person, and there’s valid reservations about travelling; it’s much more about how we show up – be accountable, demonstrate action, and lead from the front.
An emblematic example shows up in the tensions between the financial sector (under the umbrella of GFANZ – the Glasgow Finance Alliance for Net Zero) and the UN’s Race to Zero. When the Race to Zero clarified its criteria on fossil fuel expansion investment with a clear red line around no finance for new coal (fairly obvious perhaps), it caused major rifts, with several financial institutions saying the goalposts had been moved and that they’d ‘gone too far’. GFANZ was accused of quiet-quitting the Race to Zero with each underlying net zero alliance free to choose whether to accept the new criteria. The Net Zero Banking Alliance’s letter from the chair, suggests we’d need to wait and see whether they will accept the scientific advice from the Race to Zero, who’ve reported receiving corporate pushback and lobbying in recent months.
Perhaps it’s time to introduce “GreenWussing” to the expanding taxonomy of avoiding the climate ‘elephant-in-the-room’. We’ve starting to see the full repertoire of GreenWashing (making claims to be achieving positive outcomes that are either not true or distort the whole story). Increased transparency and disclosure of transition plans in coming years is likely to reveal the degrees of GreenWishing (basing strategies on hope, magic and fantasy – a complacent ‘Panglossian’ optimism – used to justify continuing business-as-usual for the time being). Since the infamous ‘Kirk-gate’ moment earlier in 2022, sharing the opinion that “what happens to the planet in year seven is actually irrelevant to our loan book’, financial institutions have been particularly nervous about letting anyone say anything in the outside world. Every utterance is starting to become tightly controlled – GreenHushing as one senior banker described it to me recently. Our own organisation, the Climate Safe Lending Network (bringing together bankers with external stakeholders in a safe and trusted space for dialogue) increasingly feels like an oasis in a desert of fragile global relationships.
But GreenWussing runs deep into the crisis of leadership failure that we witness around us. Perhaps it is based upon the psychological ‘fear of failure’ (described by Roger Martin in the Responsibility Virus) and the tendency to avoid showing vulnerability. Openly confronting complex challenges and situations without simplistic solutions (like dealing with pandemics, nature loss or climate change) is often seen as too difficult by those who would rather step back and hope it goes away. But no matter how much politicians or corporate CEOs retreat into their tortoise shells, or protest they are bit busy right now, the impending climate collapse is not going to simply blow over.
What is most needed right now are the real ‘leaders’ – to take the next courageous step. Those holding the reins of power need to show up in the right way, or step aside. There are plenty of changemakers within financial institutions who are demonstrating leadership, despite often running into a headwind of the tone form the top. The big finance powerhouses often worship at the altar of strong leadership, but the CEOs absenting themselves from the global systemic pivot required to avoid climate collapse risk leaving a legacy of cowardice and contempt. Their visions of a pleasant retirement on the book tour circuit might be undermined by global public vilification for having abrogated their responsibility. Guy Levy, then at Goldman Sachs, coined the phrase ‘long-term greedy’ – but his firm went on to admit it had knowingly misled investors in the financial crisis of 2008, selling on toxic debt to maintain their internal ‘short-term greed’ in favour of the long term prosperity of their clients. Those who are making the big financial calls on climate today are likely to offload unprecedented levels of risks to future generations saddled with the economic and social costs. It won’t be a legacy to be proud of.
We’ve been hearing the message that ‘time is running out, but it’s not too late’ for some time, and it’s now worn thin. Whilst Glasgow was about keeping 1.5 alive, very few in the climate space really believe that it still is. So, given we are sliding into the inevitable cascade of crises, who is best positioned to lead us through the global turnaround to give us the best chance of protecting and rebuilding our collective wellbeing? It’s time to show yourselves next week. Or admit that, on reflection, you might not be the best person for the job.