Open letter to ING Direct and PC Financial

To: Jan Hommen (CEO, ING Group) and
W. Galen Weston (Owner, Loblaw Companies) and
Gerald T. McCaughey, (CEO Canadian Imperial Bank of Commerce)


I am a customer of your banks and I think they provide the best options for Canadians right now, in the areas of saving and chequing respectively. At the same time, I don’t think you have given sufficient consideration to the importance of climate change – both as an ethical and a business phenomenon.

Banks play a vital role in Canadian and global society: helping to match up those who have excess funds at any particular time with those who have productive investment opportunities. That allows the first group to accumulate wealth for future purposes, while allowing the latter group to undertake projects that increase human welfare.

Not all projects achieve that end, however, and there are cases where it is not immediately obvious that a project being undertaken is unethical or a bad investment. Right now, investments made in the production and use of coal and unconventional oil and gas are both unethical and bad investments. I encourage your financial institution to wind down any investments it maintains in these areas, as well as develop and implement a policy against making such investments in the future.

The threat from climate change

We now know to an extremely high degree of certainty that burning coal, oil, and gas causes greenhouse gases to accumulate in the Earth’s atmosphere. This accumulation is dangerous for humanity, since our global society depends upon a stable climate for continued prosperity and even survival. The Holocene period in which human civilization emerged consisted of 10,000 years of unusual climate stability. During that time, we built all the infrastructure that is now relied upon by humanity. At the same time, humanity expanded in numbers and biophysical impact to the point where humans have become the dominant force on Earth. Indeed, there are those who argue that the Holocene has now been replaced by an ‘Anthropocene’ period, in which human choices will do more than anything else to determine what conditions are experienced by all the living things on Earth.

Right now, humanity continues to burn fossil fuels with abandon, disrupting the climate in ways that will ultimately be profoundly threatening. In order to produce climatic stability, humans need to abandon fossil fuels as sources of energy and replace them with zero-carbon, sustainable energy options like solar, wind, tidal, geothermal, and hydroelectric energy.

If we continue on our present course of emissions, it is estimated that global temperatures will increase by over 5°C by 2100 – far above the 2°C threshold that has been generally accepted as ‘dangerous’. With such temperature increase, it is likely that major sea level rise would be accompanied by large-scale changes in precipitation and other major climatic shifts. There is even a danger that warming could kick off a self-amplifying cycle: ‘runaway’ climate change that could leave the planet profoundly transformed.

The larger the proportion of fossil fuels burned, the more warming will take place and the greater the risk of a catastrophic or runaway outcome. As such, most of the world’s remaining coal, oil, and gas should be left unburned and underground. The global economy must be reformed so its energy needs are supplied in other ways.

Unethical behaviour

The choices we make today as a global society will affect the lives of thousands of future generations of humans. If they could speak to us, it is reasonable to conclude that they would be shouting for us to move quickly away from fossil fuels – not to condemn them to climatic instability and infrastructure that is increasingly poorly matched to the world they inhabit.

But they cannot speak to us, or indeed affect us in any way. In relation to them, we are entirely invulnerable. At the same time, they are completely defenceless when it comes to the circumstances we can impose on them through the reckless burning of fossil fuels. As philosopher and ethicist Henry Shue argues, the moral question of climate change mitigation falls into the special moral category of intentional harm imposed upon the defenceless.

It is unethical for us to deprive all those generations of the opportunities our generation inherited, in the form of a stable climate. We cannot impose the risk of catastrophic or runaway climate change upon them, despite how convenient fossil fuels are for us, and how challenging it may be to move to renewable options. When your banks invest in the production and use of fossil fuels, you participate in the unethical imposition of that harm. For the sake of doing what is right, you should stop and refocus your efforts on funding renewable and zero-carbon forms of energy that can serve human needs forever.

A bad investment

Even if we ignore the ethics of the situation, a strong case can be made that investing in coal and unconventional oil and gas (like the oil sands) is bad business. As humanity continues to pump out greenhouse gases, the effect on the climate is going to become more and more unambiguous. Scientists have understood for decades how threatening climate change could be, but those with an interest in the status quo have been highly effective at confusing the public and political debates on the issue. Eventually, however, the threat posed by climate change will be clear and governments will take action.

When that happens, investments in things like coal-fired power plants, oil sands extraction and processing facilities, and shale gas pipelines will suddenly look like poor choices. If governments act soon, they can put a price on carbon that will encourage more rational long-term decision making. If they delay action (as seems likely), investments will be made in facilities that will need to be shut down long before the end of their natural lives. The people who made those investments will suffer financially as a result.

It is far more economically responsible to invest in technologies that can serve humanity forever than it is to invest in the fossil fuel industry: an industry that ultimately has no future, both due to climate change and the fundamentally finite nature of the resources being exploited.


Right now, many Canadians see investments in things like the oil sands as a path to prosperity. That perspective only seems valid when you ignore the long-term consequences of the unrestricted emission of greenhouse gases. If all the future generations that will be impacted by climate change could vote on our current policies, I think it is nearly certain that a moratorium on new investments would be immediately agreed and existing operations would be wound down. From the perspective of humanity in general, the oil sands are best left underground. The same is true for the lion’s share of the Earth’s remaining coal, oil, and gas.

As businesses, you are most concerned about the responsibility you bear to your customers and shareholders. When you invest in projects that don’t make sense in the long-term, you expose those people to risk. Governments will eventually wake up to the danger of climate change and, when they do, they will reform policies in ways that make these investments unprofitable. It is better from a business perspective – as well as an ethical one – to simply not get involved in the first place.

Thank you for your attention,

Milan Ilnyckyj

38 thoughts on “Open letter to ING Direct and PC Financial

  1. Pingback: Probably the best Canadian banking setup

  2. Tristan

    This is an excellent and timely letter. And I wish it were true – but, I’m not fully convinced that the “poor investment” argument tells the whole story:

    “Eventually, however, the threat posed by climate change will be clear and governments will take action.

    When that happens, investments in things like coal-fired power plants, oil sands extraction and processing facilities, and shale gas pipelines will suddenly look like poor choices. ”

    Perhaps a way to think about the short-sightedness of carbon-intensive investments is to compare them to risky mortgage derivatives right before the economic crash. They looked like great investments, everyone (save an interesting few) was saying they were solid – but overnight all the decisions which had been made for short-term profit all of a sudden looked unprudent.

    This relationship between the incentive placed on people who make investment decisions to gain short term profit, and to not look like an idiot when the sky falls is perhaps quite interesting. The costs of dissenting to mortgage derivatives prior to the crash was you wouldn’t get hired, you’d probably be fired, or if you managed a firm you’d likely get pushed out of business by firms willing to make riskier choices. I’m certainly no expert – but I believe all the mainstream narratives of the crash will corroborate that situation. So, there was a dis-incentive to think on the basis of the long term – and, when the sky did fall, I don’t think there was anything like a corresponding negative incentive placed on those who had made bad decisions, and retrospective positive one placed on those who had made good decisions. The “too big to fail” policy meant the public bailed out all the firms who were the worst perpetrators over long term sustainability of investments.

    Should we expect the case to go any differently if governments chose to, all of a sudden, impose harsh carbon restrictions? Will the public not be forced to “bail out” all the banks who have financed big-oil? And, given how the government is actually controlled by the finance industry, and that the Stern report suggests that carbon mitigation will actually improve the conditions for ongoing capital accumulation, why should we expect the state’s solution to climate change to be anything other than another means to prop up the banks?

    If correct, this is quite unfortunate – because it means the banks are rational in investing heavily in carbon intensive technology, and worse, they won’t be punished for having done so when a strict carbon regime is implemented. So the investment in coal is wrong not only because it’s killing the planet – but because it might be robbing money from future taxpayers who will be forced to bail them out.

  3. Milan Post author

    It is true that firms may continue to get inappropriately easy treatment, even as governments and the general public become more aware of how threatening climate change really is.

    At the same time, there is a real risk that future political circumstances will require the shutdown of expensive investments that are far from the end of their lives. Pointing at that risk is one of the few ways banks can be encouraged to invest less in fossil fuel industries, given that they are likely to ignore most moral arguments entirely.

    Another argument that could be used is that firms that invest now in renewable forms of energy will earn substantial profits later as a result, as the world finally accepts that only renewables can satisfy human energy needs indefinitely.

  4. Byron Smith

    Although why is ING the best choice for Canadians if it is funding fossil fuel extraction? Only on a narrow view of “best” might this possibly be true. Have you looked into credit unions and other smaller savings institutions that may not give the same rates of return but which are more ethical in their investments and practices than the large banks? Might it not be better to remove your support entirely from banks that are “too big to fail” to make them one step closer to being small enough to fail? I say this as a customer of three big banks, but who is starting to look into other options as I’m aware the big players are all deeply compromised.

    Better for me to “lose” money than for me to gain “profits” from destroying the future.

  5. Milan Post author

    Regarding ‘ethical’ investments:

    I have thought about so-called ethical funds, and I worry about them for a few reasons. For one thing, it can be hard to evaluate how meaningful their claims are, when it comes to their investment decisions being better than those of other institutions. For another, they tend to charge higher fees, though the added costs associated with ethical screening are probably not all that high. In the long run, fees have a huge effect on how much savings grow. Thirdly, there may be some risk that managed ethical funds are significantly less diversified than the low-fee index trackers I invest in at ING.

    At this point in time, there may well be a personal trade-off between how much your investments are contributing to the destruction of the planet and how much risk you face of spending your old age in poverty.

  6. Milan Post author

    Regarding the credit crunch and the size of banks:

    We had a discussion before about whether Canadian banks are too big. I have also previously endorsed steps to make the banking system more robust and reduce the level of moral hazard.

    I do feel like the political opportunities created by the credit crunch have largely been wasted, especially in the United States. Not only did it take attention away from more important issues, but it seems that politicians decided to simply rescue the system in the short term, without doing much to prevent the same problems from emerging again.

  7. Tristan

    “At this point in time, there may well be a personal trade-off between how much your investments are contributing to the destruction of the planet and how much risk you face of spending your old age in poverty.”

    For someone with your earning potential this seems a completely absurd thing to say.

  8. Milan Post author

    We may well be the generation that has to pay for the retirement of those ahead of us, but who won’t get anything from the generation after us because the system eventually collapses. And most of the climate change mitigation sector is far from lucrative.

    In any case, it would be ideal if the banks that provided the lowest fees and best consumer options also accepted the need to divest from fossil fuels.

  9. Tristan

    “We may well be the generation that has to pay for the retirement of those ahead of us, but who won’t get anything from the generation after us because the system eventually collapses. ”

    So, because of this, we are justified in taking as much of the profits from unsustainable investments as possible? This seems absurd, since the reason such investments are made is precisely due to shareholder and investor pressure on banks. That’s why RBC can’t simply divest – if a higher up made this decision against the will of investors they would be fired.

    I’m sure there are investments available which don’t fund tar sands or other carbon-heavy development. And while these certainly might not pay as well as big-oil investments, it’s not clear why anyone has a right to the profits made through externalizing costs onto the future. It seems heavily strange to me that you are so opposed to flying and to trains due to their higher carbon emissions, but you have no problem earning interest on – which is direct support of – investments in unsustainable development.

  10. Tristan

    It seems to me that if we are serious about fighting for climate change mitigation, we need to strive to act on that duty in all of our capacities: as citizens, as workers and/or union members, as consumers, as investors, and as volunteers. Concerning our capacity as investors, I think we have to support a boycott and divestment campaign against those institutions that fund carbon intensive development. I don’t have all the answers about how to do this – I’m just trying to learn.

  11. Tristan

    “In any case, it would be ideal if the banks that provided the lowest fees and best consumer options also accepted the need to divest from fossil fuels.”

    Things are not ideal. We live in a world where different values actually conflict with each other, and the “easiest” (short term) option is rarely the “best”. It might be the case that in order to divest from oil investments we need to make significant sacrifices in our financial lives (i.e. lower yield investments, and perhaps less easy access to credit cards and debit machines). But even if I have to carry cash, limit my use of credit cards to a minimum, and make awkward trips to an inconvenient bank – can those be reasonable kinds of excuses not to profit from tar sands, shale gas, and goal based development?

  12. .

    The federal government’s pension obligation is a whopping $65-billion higher than reported, according to a new study that uses a different method of calculation.

    Using a fair-value measure for the government’s obligations related to public service employees, the Canadian Forces and RCMP, the C.D. Howe Institute study released today pegged the amount at almost $208-billion, or about $65-billion more than the number in the Public Accounts.

    “The larger-than-reported gap between federal pension promises in these plans and the assets that back them is a problem, both for federal employees and for taxpayers,” said the authors of the report, Alexandre Laurin and William Robson.

    “For federal employees, the gap represents a risk if furture taxpayers refuse to fill the hole left by inadquate contributions.”

  13. Milan Post author

    First, I think it’s an open question whether there are more ethical options available in Canada than PC Financial and ING Direct. Are there any banks anyone knows of that refuse to invest in fossil fuels? Or that make other significant efforts to fight climate change?

    Second, the investment impact of my PC Financial use is really very small. It is basically a clearing house that paycheques go into before being sent to savings or used to pay bills. The balance is usually only a couple hundred dollars. As such, finding a savings institution or vehicle that has a post-carbon focus is a lot more important than replacing my chequing institution.

    Third, it may not matter much if a few people choose to divest by moving banks. If 90% of banks are still willing to lend to fossil fuel companies, the fact that 10% won’t (which certainly isn’t true yet) wouldn’t deprive fossil fuel firms of any capital at all. The non-fossil banks would invest in the large part of the economy that doesn’t involve fossil fuel production directly, while the fossil-funding banks would invest just a little bit more in fossil fuel production, to easily cover any shortfall from non-fossil banks.

    That said, if major institutions like ING started refusing to fund fossil projects, it could send a strong message and drive people at other banks to press for action there. Arguably, you can accomplish a lot more by pushing a major bank to change than you can by moving your small quantity of personal savings to some tiny bank that already does some of what you want.

  14. Tristan

    “If 90% of banks are still willing to lend to fossil fuel companies, the fact that 10% won’t (which certainly isn’t true yet) wouldn’t deprive fossil fuel firms of any capital at all.”

    This seems problematic logic for a few reasons. First, because it concedes that if more than 10% did divest then it would make a difference – and for this to be the case, first the figure would have to get to 10%. So, in fact you are saying you have no obligation to be an early adopter of the new position because it would not cause an immediate benefit – even though in the long term any benefit caused by divestment would rely on early adopters who were willing to act with no immediate benefit. In general, it seems a bit strange to expect direct benefit from any communal action – these actions work because we work together with many other people over time, we should not expect our individual contribution to be particularly significant.

    Second, I’m not sure if it is true. The tar sands expansion is expansive, and the amount of capital it will require is not small. Is the current expansion limited by the speed at which applications are processed, the speed at which pipelines can absorb increased production, or the speed at which capital can be secured for new projects? I’d wager it’s a combination of all three. Anytime there is a new project, that project needs to secure funding. When the price of oil is down, it is not always easy for these projects to get the funding they need to expand as quickly as possible. Therefore, I do think investment banks operating on the margins do have an effect on how quickly the expansion takes place.

    “Arguably, you can accomplish a lot more by pushing a major bank to change than you can by moving your small quantity of personal savings to some tiny bank that already does some of what you want.”

    This may be true, but not acting as a solo investor. For this to work you need to organize investors in ING towards your cause. That will involve finding alternative investments which you together can threaten to move into, away from ING, if ING does not submit to your demands. You can’t convince ING to divest through arguments, you can only do it through economic force. So, you should work on convincing the investors who hold the most sway in ING.

  15. Milan Post author

    It would be useful if ING or someone else created an index tracking fund that included everything in a stock market, aside from firms involved in fossil fuel production or other activities that are fundamentally incompatible with climate stability.

    It wouldn’t need much active management, so it could have fees lower than the 1% ING currently charges for their index trackers.

  16. Tristan

    How could you guarantee that investing in such a fund would not see your money being used in tar sands financing? As I understand it, the tracking fund indexes how much money ING owes you, it doesn’t specify what your investment funds.

  17. .

    Index fund
    From Wikipedia, the free encyclopedia

    An index fund or index tracker is a collective investment scheme (usually a mutual fund or exchange-traded fund) that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions.

  18. Milan Post author

    For instance, an ordinary index tracker might follow every stock in the Toronto Stock Exchange. Whatever the average performance of a firm in that market is establishes the return of the fund, before fees.

    Someone could create post-carbon index trackers that include everything in a market aside from companies involved in fossil fuel production.

    ING Direct’s Streetwise Balanced Growth Fund is linked to several indices. The Canadian bond component seeks to replicate the DEX Universe Bond Index; the Canadian equity component seeks to replicate the S&P/TSX 60 Index; the U.S. equity component seeks to replicate the S&P 500 Index; and the international equity component seeks to replicate the MSCI EAFE (Europe, Australasia and Far East) Index.

    Troublingly, many of the top holdings have an oil sands connection:

    1. Royal Bank of Canada (1.9% of portfolio)
    2. Toronto Dominion Bank (1.6%)
    6. Suncor Energy Inc. (1.3%)

    Some of the connections are less direct. For instance, it is almost certainly the case that the iShares S&P 500 Index Fund (1.4% of portfolio) includes some fossil fuel companies.

  19. .

    FTSE4Good Climate Change Criteria

    Policy: As well as establishing a company’s commitment to addressing climate change impacts, these criteria aim to encourage companies to support and contribute to scientific understanding and consensus on climate change; and to participate in strengthening public policy frameworks to address climate risk and reduce GHG emissions.

    Management: These criteria recognise that one element of an effective management system is the use of targets so this is therefore a requirement for high impact companies. Criteria for medium impact companies will be initially focused on disclosure rather than management.

    Disclosure: The disclosure criteria recognise it is essential that companies disclose reliable, consistent and comparable data on GHG emissions. This is important to provide a basis for effective management of emissions and for evaluation of the company by stakeholders. However, while it is important that companies use a robust and standardised methodology for compiling GHG data, FTSE may allow some flexibility in the early stages of criteria implementation, reflecting that no single methodology is yet accepted as the single global standard.

    Performance: FTSE recognises that the key performance measure for assessing companies’ action in response to climate change is their level of absolute GHG emissions (adjusted for changes in company structure) which should decline over time. However, at present it is difficult to measure and compare such reductions in an objective manner. As the understanding of how to fairly and accurately measure corporate performance improves, FTSE intends to further develop these performance requirements and also introduce criteria for medium impact companies.

    Scope: Some activities are more within the control of companies than others. Companies have the greatest responsibility to reduce their impact on climate change for the activities most under their control. These criteria therefore apply to companies’ operational GHG emissions and their product GHG emissions. Upstream emissions (the consequence of suppliers’ activities and the extraction or production of raw materials) are not included at this stage. This is partly because these are often less within a company’s control, but mainly because at present there are insufficient common frameworks to measure and address these emissions.

  20. Milan Post author

    Maybe the possibility of a post-carbon index tracking fund could be brought to the attention of the bigwigs of the climate change mitigation movement (like James Hansen and Bill McKibben).

    I am sure they interact with some of the kind of people who could set up such an investment vehicle.

    The FTSE4Good fund described above is pretty inadequate. It is not set up specifically to reduce investment in fossil fuel production, and it only includes some firms listed on the London Stock Exchange.

    To be a good general saving vehicle, it would need to be less tied to the performance of a single market.

  21. Tristan

    The power of top players in the “market” is a major reason why climate mitigation has not taken place, why it is “politically impossible” for powerful states to act in ways coherent with the long term survival of the species, or even the medium term survival of our economies.

    Thus, I don’t think anyone has a right to benefit from “the market” as it currently exists. We should be divesting from “the market”, and investing specifically in those forces which undermine the current economic and power structures. If we want green-energy to flourish, we probably have to invest directly in it, rather than trying to find some neutral funds which seem to have less tar and its hands. That might mean we have to make “bad” investments, investments will will shrink. But it’s not at all clear that we have a right to the growth of any investment when that growth is contingent on externalizing costs on future generations.

  22. Milan Post author

    To a large extent, ‘growth’ of the sort that is attainable today is just hedging against inflation. Consumer prices in Canada are rising by about 1.9% per year. Savings accounts at ING are only paying 1.5% interest. The only realistic way to save up enough to retire at any age, on a middle class income, is to take advantage of the capital appreciation opportunities in bonds and (especially) stocks.

    On the ethical point, there are a few responses. Our task is to de-carbonize the global economy, not to stop growth or destroy capitalism. Indeed, preventing catastrophic climate change requires massive investment, directed at zero-carbon forms of energy. Our odds of avoiding catastrophic climate change are definitely better if people will be able to make piles of money investing in concentrating solar facilities, wind farms, improved electrical grids, etc.

    Certainly, some firms have tried to block action on climate change, and have done so in unethical ways. That being said, we need firms to implement the nitty gritty details of emissions reductions. Governments need to set the right incentives, but it will largely be up to the market to get the job done.

    Private companies generate enormous positive externalities. Think about all the ways in which the development of technology and deployment of infrastructure have improved human welfare. The world as a whole certainly needs to correct the major negative externalities associated with climate change, but it seems like a non-starter to suggest that we can do that without taking advantage of the unique skills, capacities, and capabilities of the private sector.

  23. Tristan

    I’m not going to continue this debate – our understandings of 20th century economic history are far too divided to expect any meaningful dialogue. What I can say is that by investing in market trackers you are directly contributing to the financing of tar sands expansion. If that doesn’t bother you, fine. You can ride the greyhound while your dollars fund bitumen and coal extraction, as well as lobby groups which oppose electrification of Canadian railways.

  24. Milan Post author

    a) It has not been established that there are investment options available in Canada that do not directly or indirectly provide capital for the oil sands. Short of having a pile of $20 bills under your bed – losing 2% of their value each year – what do you recommend?

    b) It has not been established that individual divestment does any good whatsoever, given that there are others willing to fill the gap. Is making a superficial moral point the important thing? Or finding a way to actually change outcomes?

    When a person takes the bus rather than flies, there is a concrete impact that can be measured. Right now, you are condemning me on the basis of an abstraction.

    I have proposed several concrete actions with at least some chance of making a difference – such as lobbying ING Direct (as I am doing here) and encouraging the creation of non-fossil index trackers. You have indicated a willingness to use less convenient banks, but haven’t shown how that would have any positive impact.

  25. Tristan

    “a) It has not been established that there are investment options available in Canada that do not directly or indirectly provide capital for the oil sands. Short of having a pile of $20 bills under your bed – losing 2% of their value each year – what do you recommend?”

    I don’t have the answers – but it seems quite unlikely that every single available investment is as likely as any other to fund, on the margins, the least profitable tar sands projects that need financing to go forward. It seems less important to me that your investment in some way support the tar sands, than it directly go towards the financing of marginal projects. And, if you invest, even a little, in TD and RBC – then you likely are investing on that margin.

    “b) It has not been established that individual divestment does any good whatsoever, given that there are others willing to fill the gap. Is making a superficial moral point the important thing? Or finding a way to actually change outcomes?”

    I don’t recommend any individual action. I recommend collective action, and divestment campaigns are collective action. If you think you can mount a collective action campaign within ING to force ING to divest from marginal tar sands investments, then more power to you. What I’m opposed to is defeatism – simply because there are no simple options available, therefore you are entitled to invest in anything.

    “When a person takes the bus rather than flies, there is a concrete impact that can be measured. Right now, you are condemning me on the basis of an abstraction.”

    This isn’t clear at all. I think the value of these actions is largely symbolic – and that is a real value. I’m not making fun of your decision to take the bus rather than flying, but I don’t think the principle value comes from anything measurable – rather it comes from the way your actions show up to others, and demonstrate to them serious people’s seriousness about the need to act on climate change.

    “You have indicated a willingness to use less convenient banks, but haven’t shown how that would have any positive impact.”

    You’re right – I don’t have the answers. I was hoping that by discussing this here others with more knowledge about banks and investments might pipe up and let us know about other options.

  26. Alison

    What’s needed is a regulatory infrastructure and laws to make damaging investments illegal. Obviously the climate change science is clear, but real change can’t happen until climate change issues are seen as social and political crisis that they are.

    I’m not sure if you’re familiar with the work of AIDS activists ACT UP! (and their affiliated art wing, Gran Fury). Part of their tactic was to frame AIDS as a “social” crisis, and in doing so they highlighted the major ways that sexism, racism, and homophobia helped spread AIDS. In sum, in order to stop AIDS and recognize the rights of people with AIDS, oppression has to be stopped too.

    I wonder if part of the problem with climate change is that it’s framed in economic (“Oh, reducing carbon will cost too much money!) or scientific terms. “We” don’t think about the human cost in terms of suffering and injustice. It is not thought of as a pressing human rights problem – we don’t care about “other” affected by climate change or our own children for that matter. If it was a pressing social issue, perhaps we’d see people more fed up with the way banks contribute to human suffering. I think a political (“consumer”?.. cynical) movement is the thing that would put a just infrastructure in place. Banks just “shouldn’t” be allowed to operate in this way, but of course they can.

  27. Tristan

    When groups stand up against banks committing crimes in ways that might actually dissuade them from the criminal investments, we all run to our safe liberal rhetoric about how, while we might agree with some of FFFC’s principles, we must never promote violence. But this isn’t to support FFFC – their mistake is precisely not to have recognized the radicality of Canadians distaste of violence. In reality – there simply is no support in Canada for political movements which would attempt to control government policy through, to use Trudeau’s language, an “unelected parallell power”.

    The obvious response, I think, is to take seriously Gene Sharp’s ideas that non-violence must be pursued as seriously as other groups have pursued violent struggle in the past. Quoting from his 1983 essay “Nonviolent Struggle Today”:

    “Nonviolent struggle is a major type of conflict, a major means of waging struggle. It is not conflict resolution. It is not peaceful conciliation and loving of enemies. It is not compromising with the tyrant or with a Hitler saying, “Okay, let’s resolve this peacefully: you take half of the Jews and let us have the other half.” It is, instead a type of struggle, a type of fighting which is, although nonviolent, exactly the equivalent to military warfare. You can negotiate and compromise on things that aren’t important, like whether we should make the room blue or white. We can compromise by making it both and it’s no big deal. But if they ask for half our lives or half our religious freedom or half our national identity or half our right to determine our future, half our labour and half the justice which we deserve, half of the end of apartheid and racist oppression, while they get to keep the other half…what should we do?”

    “People need a substitute means of struggle. It doesn’t do a damned bit of good simply to preach the immorality of violence and participating in war. If your objective is getting rid of war you’re not going to achieve it that way.”

    “We need long term planning, training of populations, developing the kinds of nonviolent weapons that are available, and knowledge of how to use them. We need to adopt the principles of forumlating long term strategies to use resources to the maximum impact and effectiveness. We need to know how the shorter range and more limited tactics and specific methods all fit within a context in which we would be theoretically capable of mobilizing most, if not all , of the population and institutions of society as combat forces, resistance forces, liberation forces, or national defence forces, as the case may require. These ideas are contrary to many earlier opinions about nonviolent struggle.”

  28. Milan Post author

    When groups stand up against banks committing crimes in ways that might actually dissuade them from the criminal investments…

    ‘Criminal’ is not an ethical category. It is always the particular power structures in any place and time that determine which actions count as ‘criminal’ and which are not. As Martin Luther King points out in his speech ‘But If Not‘ it was a crime to provide assistance to Jews in Nazi Germany.

    As such, I don’t think it makes any sense to condemn the legal behaviour of banks (or anybody else) as a ‘crime’. What counts as a crime is decided by those with power; by contrast, what counts as ‘unethical’ or ‘immoral’ is decided on the basis of logic, argument, and evidence.

  29. Tristan

    Actually, both senses of the term “crime” exist. We can understand what it means for a state to commit crimes against humanity whether or not charges are ever laid. That’s why the Russell Tribunal is comprehensible.

    Moreover, it is particularly appropriate to use the term “crime” to refer to the immoral actions committed by those in power, when those actions and their protection serve to de-legitimate the power structures (which rely mostly on consent rather than force) which decide what counts as a “crime” or not. We live in a “peaceful” country, so we’ve never experienced what happens when a state loses its legitimacy in the eyes of a significant portion of its population. But that doesn’t justify ignorance of the structural conditions under which faith in institutions breaks down. We might have a duty to work towards breaking down faith in those institutions if that is what it takes to force those institutions, or new ones, to stop the immoral, or in my language “criminal” actions of banks and oil firms.

  30. .

    Oxfam’s fantasy ‘climate court’ is both prescient and practical

    Over a thousand legal experts, politicians and economists gathered in Dhaka this week to explore routes to justice for the victims of climate criminals – and found that precedents exist

    Imagine an international court where the poorest people in the world could sue countries such as the US or Britain for failing to keep to agreements to reduce climate emissions or for knowingly causing devastating climate change.

    It’s some way off, but this week has seen an extraordinary tribunal being held in Dhaka, the capital of Bangladesh, with more than 1,200 people including British lawyers, politicians and economists, listening to the testimonies of villagers living at the frontline of climate change.

    It was only a mock tribunal, organised by Oxfam, but it explored the growing idea that the largest carbon emitters should be bound by international law to protect the lives and livelihoods of those most at risk from the impacts of climate change.

    Rushanara Ali, the newly-elected MP for Bethnal Green and Bow, who is already shadow minister for international development, was there along with Richard Lord QC, who will be looking at the legislation that is available for affected countries to pursue.

    The stories the tribunal heard were heartbreaking. Mamtaz, one of four plaintiffs, wanted to know who was legally responsible for her fisherman husband’s death. She and others testified that the seas off Bangladesh are now rougher more often and that boats were capsized more frequently in the increasingly stormy weather. Barek Majhi, a fisherman, told the tribunal how his three trawlers had sunk and ruined his means of making a living.

  31. .

    Of interest to Oxfam and even the UN could be a new paper from Field, the London-based Foundation for International Environmental Law & Development. This shows how there are many existing laws and principles available for states to sue one another for damage caused by climate change, and how this could pressure nations into stronger international action.

    Top of the list was the “no-harm rule”, a widely recognised principle of customary international law, which Field’s lawyers say is directly applicable to climate change.

    Under the principle, nations are bound to prevent, reduce and control the risk of environmental harm to other nations. The classic example of this was litigation over transboundary air pollution between Canada and the United States, where Canada was forced to compensate the US for damage caused by sulphur dioxide emissions.

  32. .

    What Good Is Wall Street?
    Much of what investment bankers do is socially worthless.
    by John Cassidy

    “…Yet Wall Street’s role in financing new businesses is a small portion of what it does. The market for initial public offerings (I.P.O.s) of stock by U.S. companies never fully recovered from the tech bust. During the third quarter of 2010, just thirty-three U.S. companies went public, and they raised a paltry five billion dollars. Most people on Wall Street aren’t finding the next Apple or promoting a green rival to Exxon. They are buying and selling securities that are tied to existing firms and capital projects, or to something less concrete, such as the price of a stock or the level of an exchange rate. During the past two decades, trading volumes have risen exponentially across many markets: stocks, bonds, currencies, commodities, and all manner of derivative securities. In the first nine months of this year, sales and trading accounted for thirty-six per cent of Morgan Stanley’s revenues and a much higher proportion of profits. Traditional investment banking—the business of raising money for companies and advising them on deals—contributed less than fifteen per cent of the firm’s revenue. Goldman Sachs is even more reliant on trading. Between July and September of this year, trading accounted for sixty-three per cent of its revenue, and corporate finance just thirteen per cent.
    In effect, many of the big banks have turned themselves from businesses whose profits rose and fell with the capital-raising needs of their clients into immense trading houses whose fortunes depend on their ability to exploit day-to-day movements in the markets. Because trading has become so central to their business, the big banks are forever trying to invent new financial products that they can sell but that their competitors, at least for the moment, cannot. Some recent innovations, such as tradable pollution rights and catastrophe bonds, have provided a public benefit. But it’s easy to point to other innovations that serve little purpose or that blew up and caused a lot of collateral damage, such as auction-rate securities and collateralized debt obligations. Testifying earlier this year before the Financial Crisis Inquiry Commission, Ben Bernanke, the chairman of the Federal Reserve, said that financial innovation “isn’t always a good thing,” adding that some innovations amplify risk and others are used primarily “to take unfair advantage rather than create a more efficient market.”

    Read more

  33. Milan Post author

    To a large extent, index tracking funds are an alternative to investment bankers. They provide a mechanism to gain access to capital appreciation in equities, with a lot of diversification and low costs.

    A low-fee index tracker that excluded firms heavily involved in fossil fuel production and use would be a very appealing investment vehicle.

  34. Tristan

    An interesting article on the current predicament by a Scientist engaged in questioning how Science should think of itself today.

    Sustainable Growth Is An Oxymoron
    Rudy M. Baum

    “If Earth is finite, then by definition, so is our capacity to produce and consume. Yet we exist within a socioeconomic system that is predicated on endless growth. The rate of growth—in population and economic activity—turned exponential about 200 years ago with the advent of the Industrial Revolution. ”

    “It turns out the availability of fossil fuels wasn’t the wall that put a limit on growth; climate change, global warming, climate disruption—whatever you want to call it—turned out to be the wall. ”

    “The fact is that, eventually, we have to learn to live off the sun in real time. ”

    “To live off the sun in real time, we’re going to have to do two things: We’re going to have to slow down, and we’re going to have to get a lot smarter. Slowing down will involve making the wrenching transition to an economic system that is not predicated on growth. I don’t know what that system looks like. In my mind, I have a notion of something I call a high-tech subsistence economy in which consumption is not the sine qua non of success.”

    “I am not saying that we should go back to calling ourselves natural philosophers. I am saying that scientists, especially chemists, who are among the most practical of scientists, must become far more involved in this most important policy debate of our time.”

  35. .

    Number of seniors living in poverty soars nearly 25%

    The number of seniors living in poverty spiked at the beginning of the financial meltdown, reversing a decades-long trend and threatening one of Canada’s most important social policy successes.

    The number of seniors living below the low-income cutoff, Statistics Canada’s basic measure of poverty, jumped nearly 25 per cent between 2007 and 2008, to 250,000 from 204,000, according to figures released on Wednesday by Campaign 2000. It’s the largest increase among any group, and as the first cohort of baby boomers turns 65 next year, could place increased pressure on families supporting elderly parents.

    Economists say women make up as much as 80 per cent of the increase in seniors poverty. Armine Yalnizyan, economist at the Canadian Centre for Policy Alternatives, said more women than men were living close to the poverty threshold before the financial crisis took hold in 2008, and, because their retirement savings tend to be smaller, were more likely to slip below the low-income cutoff. Men over 65 are also twice as likely as women over 65 to have a job. By January, 2009, there were 23,000 fewer women over 65 working than there were seven months earlier, while the number for men changed very little, Ms. Yalnizyan said.

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