Banks claim they’re getting environmentally conscious (but keep funding fossil fuels)
In October, 2018, major global banks met to revise the Equator Principles, which are industry-led due diligence standards to prevent banks from endorsing environmentally and socially harmful projects. In what many see as a duplicitous move, however, several of the Equator Principles signatories also continue to support Enbridge, the Canadian company behind the Line 3 tar sands pipeline.
Protests took place during the October Equator Principles Association meeting, and activists called out the Enbridge-funding banks for complicity in violating Indigenous rights and promoting investments in dirty energy. The protestors made visible the needs for financial institutions to be held accountable for investments that are incompatible with the goals of the Paris Agreement on climate as well as to end Indigenous rights abuses and climate chaos.
The Equator Principles is a risk management framework adopted by numerous financial institutions for determining, assessing and managing environmental and social risk in projects. It is primarily intended to support responsible risk decision-making. Despite these global standards, some of the world’s biggest banks continue to fund environmentally damaging projects that disregard Indigenous communities’ rights to free, prior, and informed consent.
Ruth Breech, Senior Campaigner on Climate & Energy with the Rainforest Action Network, agreed to chat with CleanTechnica about the protests. As someone “on the ground,” she was part of about 20 non-governmental organizations, including the Indigenous Women’s Divestment Delegation, who met with 30 representatives of financial institutions of the Equator Principles Association.
According to Breech,
“These banks heard directly from Indigenous women whose communities are directly impacted by bank funded fossil fuel projects. Individual banks have policies advising on projects that impact Indigenous peoples and support a transition to a low carbon economy, yet they continue to support the companies behind the projects.
The banks acknowledged the messages that we sent — both in the boardroom and on the streets, but their actions continue to fall short. The Equator Principles is a necessary gathering of important financial institutions, but its timeline of adopting revisions and ambition of scope fall short in actually addressing the grievances on the ground. The bankers will have to do more than nod heads; they are going to have to take bold actions to align their own policies and practices.”
Breech added that over 60 people met on October 16, 2018 in a Washington, DC boardroom, and on October 17, 2018 about two dozen people were out in front of the International Finance Corporation (IFC) building “to send a clear message about the urgency needed for banks to act on human rights and climate stability.”
Equator Principles’ Financial Institutions Receive Letter Admonishing Their Actions
In addition to the protests, 45 organizations signed a letter to the Equator Principles’ financial institutions (EPFIs), outlining how they “have so far failed to ensure that EPFIs adequately respond to climate change as an existential risk to instructions, the planet, as well as to their own business operations.”
Investing in Enbridge’s Line 3 = Disregard for Climate Crisis Action
Enbridge‘s Line 3, $2.9-billion US portion of the Line 3 Replacement Program, known as the Line 3 Replacement Project, consists of replacing existing 34-inch pipe with new 36-inch pipe for 13 miles in North Dakota, 337 miles in Minnesota, and 14 miles in Wisconsin. In total, the 1,000-mile pipeline runs from Hardistry, Alberta, to Superior, Wisconsin, and is designed to have an initial capacity about twice that of its former pipeline. Moreover, that volume can be increased within the cross-border pipeline network.
The pipeline, built in the 1960s, crosses Indigenous lands, and a state judge recommended in April, 2018 that the new Line 3 use the same path rather than a proposed expansion. However, Minnesota state regulators largely approved Enbridge’s preferred route instead, which skirts reservations but passes through areas where tribal members harvest wild rice. Enbridge’s website positions the replacement project as “an improvement of our pipeline infrastructure—helping to ensure that Minnesota and the surrounding region are connected to secure, reliable, and growing supplies of North American crude oil.”
Investment support for Enbridge by the Equator Principles signatories continued concurrently with the 6th Intergovernmental Panel on Climate Change (IPCC) publication that shows the desperate urgency that companies and individuals need of taking concrete steps to tackle the climate crisis. The IPCC document contained 3 major admonitions.
- We need to aim to limit warming to 1.5 degrees Celsius, not just “well below 2 degrees.”
- There is no room for new fossil fuels in a 1.5-degree world, even with a larger range of estimated carbon budgets.
- There is no time to lose in rapidly reducing emissions.
The IPCC outlined how meeting the under 1.5º C goal will require a massive change in how humans behave and how we derive the energy we currently consume. In essence, the world will have to remove massive amounts of carbon dioxide from the atmosphere to meet the 1.5º C goal.
The Line 3 pipeline allows for significant exports of Canadian tar sands crude oil, which is difficult to extract, costly to transport, and has a high carbon footprint compared to other crude oil. 350.org argued that Enbridge should have been required to decommission the existing Line 3 in a permanent way and seek approval for a replacement on that project’s own merits — instead of conferring approval as a reward for taking overdue basic safety steps.
“The new Line 3 pipeline directly threatens the cultural survival of the culture of Ojibwe Indigenous peoples. The route would pierce the heart of the 1855 Treaty territory, where the members of Ojibwe bands retain the rights to hunt, fish, harvest wild rice, conduct religious ceremonies, and travel. Wild rice lies at the core of Ojibwe identity and culture — because of its critical nature, wild rice harvesting is explicitly defined as a right in the treaties of several bands of Ojibwe with the US government. Line 3 could send up to nearly one million barrels of tar sands per day through dozens of the richest wild rice beds in the world on its way through the Mississippi River headwaters in the Great Lakes.”
They argue that the proposed route endangers 3 of the continent’s major watersheds including the Great Lakes, home to 1/5 of the world’s fresh water. Honor the Earth calls upon us all to accept our responsibility as water protectors to stand up to Line 3 rather than allow it “to desecrate our lands, violate our treaty rights, or poison our water.”
Who are the Actors in the Equator Principles Protests?
A coalition of indigenous, environmental, and climate justice groups rallied outside the Equator Principles meeting, demanding stronger commitments from the world’s biggest banks to stand behind the impetus to protect the environment and to engage in sustainability practices that meet the Paris Agreement on climate temperature limits to 1.5 – 2 degrees increase maximum.
The Women’s Earth & Climate Action Network is a solutions-based, multi-faceted effort established to engage women worldwide to take action as powerful stakeholders in climate change and sustainability solutions.
Honor the Earth is a Native-led organization that addresses the two primary needs of the Native environmental movement: to break the geographic and political isolation of Native communities and to increase financial resources for organizing and change.
The Rainforest Action Network takes action against the companies and industries driving deforestation and climate change.
BankTrack is the international tracking, campaigning, and CSO support organization targeting private sector commercial banks and the activities they finance.
Among other goals, the Sierra Club champions solutions to the climate crisis; works for clean air, safe water, land protection, and a vibrant natural world; and, fights for environmental and social justice.
Protestors argued that, had the Equator Principles been stronger, banks would not have financed the Dakota Access Pipeline. Indeed, major banks from the US and around the world called for a “do over” and a “second chance” after funding Energy Transfer Partners’ (ETP) Dakota Access Pipeline without the consent of the Standing Rock Sioux Tribe. After the human rights abuses at Standing Rock, banks said they would reform the Equator Principles.
While banks are revising the Equator Principles until 2019, address concerns about potential rights violations and environmental degradation continue. Before 2019, critical projects – including Enbridge’s Line 3, ETP’s Bayou Bridge Pipeline, and TransCanada’s Keystone XL — still receive support from Equator Principle banks.
Photographs courtesy of Women’s Earth and Climate Action Network.