Green Go the Banks

Banks should focus on investment opportunities, not the latest bandwagon

By Richard Watson

Thou shalt not be any other colour except green. How could anyone disagree with that these days? Ever since Al Gore put his PowerPoint slides to music, companies the world over have taken it upon themselves to go green; banks are suddenly carbon neutral. But it’s not as though we didn’t know about environmental issues before; so what’s going on?

Personally, I think it’s the madness-of-crowds meets risk-aversion. People tend to swing from one so-called crisis to another. Last year, it was flu pandemics (a dead certainty according to experts). A few years previously, it was deep vein thrombosis on long-haul flights. And before that we had acid rain, rouge asteroids and terrorism. Only, mostly, we didn’t. Most of these so-called threats have failed to materialise, and when they have they’ve been much less of a threat than we thought. September 11? Yes, that was a black day, but the fact of the matter is that more Americans died on public roads escaping the “threat” of airline highjack in the few months following September 11 than died in the Twin Towers themselves. This is not a widely reported fact, but it’s a fact nevertheless.

If there’s a trend buried deep within all of this, it’s that we are increasingly taking worst-case scenarios to be most-likely outcomes. We are frightened rabbits, focused on, and frozen by, the oncoming headlights of change, and consequently unable to do anything about problems much closer to home.

Yes, climate change is an issue, but the score on the door is that global temperature has increased by 0.76°C between 1850 and 2005, and any other figure is a speculative projection (that is, it hasn’t happened yet). This is not to say that it won’t happen, and neither am I saying that we shouldn’t worry about the possibility of it happening, but, perhaps, we should also worry about things that are more certain, more immediate and more actionable.

It’s nice to hear that banks are going carbon neutral. Doing something is better than doing nothing at all, but where were the banks 10 years ago when virtually all the current data about climate change was available? Either banks are jumping on a green bandwagon because everyone else is (risk-aversion), or else we have all lost our collective minds.

Here’s an analogy to prove my point. In the UK, the Ministry of Defence is proposing quieter warheads that reduce noise pollution and grenades that produce less smoke? Holy smoke! There are even experiments to see if explosives can be turned into farm manure. To me this is nuts, but to Dr Debbie Allen, director of corporate social responsibility at BAE systems, it is important to consider the environmental impact of weapons. Oh, my god, I’ve entered a parallel universe where black is white and green is absolutely everywhere.

Sure, there’s no reason not to look after the “global” environment, but let’s also not forget that there are some pretty big issues much closer to home. For example, Macquarie Bank has been quietly supporting the Cape York Institute to develop indigenous education programs. They’re not alone either. Some other Australian banks are similarly supporting indigenous issues and should be loudly applauded.

But I’m going off track.

Green is good. So is greed in certain circumstances. Greed or, more accurately, the search for investment opportunities will sort out these and other problems. A mixture of capitalism and climate change will create a heady blend of investment in alternative technologies and innovation. In other words, we’ll solve it. There will also be shifts in customer attitudes and behaviour, but legislation will probably be the single largest driver of change both locally and globally. Banks can play their part in all of this, but it would be nice if they actually got in front of the parade once in a while.

Richard Watson is a trend forecaster and futurist. His website is http://www.nowandnext.com/