Our Burning Planet


Reporting the truth: What is the private banking sector’s role in the climate crisis?

Reporting the truth: What is the private banking sector’s role in the climate crisis?
From left: Daily Maverick Managing Editor Jillian Green, Our Burning Planet journalist Tiara Walters and Head of Investment Banking Division, Absa CIB, David Renwick. (Photos: Supplied)

In Our Burning Planet’s first webinar, journalists Tiara Walters and Jillian Green, with Absa’s David Renwick, discuss the role of big business in the climate crisis, including its involvement in the use of fossil fuels.

Our Burning Planet (OBP), Daily Maverick’s global change unit, hosted its first webinar on Thursday, delving into big business’s responsibility to help tackle the climate crisis, as well as the challenges posed by global change. Never afraid to speak truth to power, Daily Maverick approached the Absa Group, whose recent financial support has allowed the OBP team to expand.

OBP developed from an idea discussed by writers Kevin Bloom and Richard Poplak over a glass of whisky after the launch of the UN’s shock 2018 report of Global Warming of 1.5 °C: their vision was to thrust the climate crisis and global change firmly into the investigative spotlight. OBP was launched that same year and, now with funding from Absa, has grown into a unit of 10 journalists.

Host and OBP senior science journalist Tiara Walters invited panellists David Renwick, head of investment banking at Absa, and OBP managing editor Jillian Green to discuss how big business could play a pivotal role in leading the charge against global change.

Green said it was important to include business in discussions around the climate crisis, which was but one aspect of a suite of global change challenges, such as the biodiversity and pollution crises: “Business has a role to play. And business needs to be challenged in meeting that role… the planet is not just for you and me. If business wants to survive, they’ve got to get involved.”

Why Absa is supporting Our Burning Planet

In the webinar, Walters suggested that Absa’s alignment with OBP, a no-fear, no-favour unit not known for tackling safe issues, might be seen as a PR risk, especially for a financial institution.

“Absa have had a firm view that they want to play a shaping role in society. And there are few bigger threats than the potential environmental impact on our society,” Renwick responded, noting: “So in some respects, I think it’s high risk not to be involved in this agenda.”

Reality vs intent

Divesting from fossil fuels appears to be popular among the private sector, particularly financial institutions, at the moment … or rather, showcasing that intention to divest.

Green mentioned how OBP’s inboxes were flooded with press releases from companies saying they were divesting from fossil fuels and moving toward more renewable energy.

“The intention is great, you know, but intention must be followed by action,” said Green. “And I think, because it’s so much of a buzzword now, it’s our responsibility as journalists to… hold them accountable to those promises.”

Renwick agreed, adding, “The easy discussion is power generation, fossil fuels. It’s easy identifying coal-fired power stations and coal mining. And the other bookend: it’s easy to identify renewable energy and how good it is. 

“But it’s the carbon emissions that happen in between, which are also the next layer. It’s what’s happening in the transport industry, the agricultural industry, in engineering and manufacturing. It’s not just about the bookends, it’s about all of that which sits in between, that we need to address.”

A just transition away from fossil fuels

Earlier this year, the International Energy Agency (IEA) said that the world could not fund any more fossil fuel projects if we were to meet our Paris Treaty targets by 2050.

However, Walters pointed out, even if we were to reach those targets, we might still need 24 million barrels of oil per day in 2050, according to the IEA.

Walters asked, “So, if that is really the case, how do banks simply walk away from fossil fuel investments when we might, regrettably, still need oil and gas to help power mid-century society?”

“I think that’s the heart of this kind of concept of a just transition,” said Renwick, mentioning the World Health Organization (WHO) statistic that three billion people still relied on hard fossils for energy every day.

WHO reported, “Around three billion people still cook using solid fuels (such as wood, crop wastes, charcoal, coal and dung) and kerosene in open fires and inefficient stoves.”

Renwick said, “You also see a huge amount of investments in research and development, whether it comes to bringing the unit cost of production down for renewable energy, but also huge amounts going into battery storage and the technology, which sits behind energy storage, which is a huge inhibitor at this point in time to actually accelerating the transition from fossil fuels to green energy.”

Here, Renwick questioned the value of gas as a transition fuel: “[Natural gas is] not as bad as burning coal, but it’s also not as clean as renewable energy.”

Gas is not green

“Natural gas is a really tricky one,” Walters pointed out, “and it’s still very much a fossil fuel.”

With the gas industry growing in the global South, it was important to consider that gas was not a sustainable source of energy, she said.

According to Walters, there was a real-world dilemma underpinning attempts to put natural gas and clean energy in the same category; while Green cautioned against expedient decisions: “We all are suffering from power shortages, but we shouldn’t just look to what is most convenient and what is easy, because those decisions will have long-lasting impacts — not necessarily on ourselves now, but on future generations. 

“And so everything that we do, as journalists, must really be a question of what is happening now, and what impact is it going to have on the future?”

During the panel discussion, an audience member posed a question to Absa regarding its fossil fuel investments: “Just how many loans to fossil fuel companies do you currently have on your books? And why did Absa refuse to rule out supporting the Karpowerships, which would have run on natural gas? The fossil fuel industry does indeed claim that gas is a ‘bridge fuel’, but no scientist with any credibility considers it a climate solution. (Natural gas production comes with huge methane leaks, and methane is 80 times more potent as a greenhouse gas than CO2.)”

Renwick noted that the question was a “good” one: “And it’s one which you need to hold financial institutions accountable for. But it’s that whole thing, that whole spectrum of corporate which sits in the middle, which we also need to tackle.”

In response to the fossil fuel industry claiming that gas was a “bridge fuel”, Renwick said, “I haven’t seen any science around gas and it’s in the construct of a transitional environment where perhaps the capacity to store power, which is produced from wind and solar, is not at the advanced stage. And there is a discussion, how do you protect economies and societies on that journey?”

In response to Karpowerships, Renwick argued, “I think it’s important that we’re a very big supporter of renewable energy within South Africa. Roughly 46% of all the IPP projects, we’ve led or played a leading role in financing. So we are also a strong partner with people like the IPP office in terms of what they’re trying to deliver within the economy. We always have to look at everything on a case-by-case situation.”

Voicing outcomes from a recent AGM, Renwick further argued, “We are not going to put our reputation of being one of the leaders in renewable energy finance in this market at risk through one particular project which does not meet the appropriate environmental standards.”

In response to Absa funding fossil fuels, Renwick stated, “I think it was disclosed recently, through our whole AGM process, that we have less than 1% of our loans and advances, [that’s] our exposure directly to the fossil fuel industry.”

While it still had active loans, Renwick noted that Absa was not going to support any form of exploration of oil and gas. 

Supermarkets and single-use plastic

The discussion also veered into other realms of private sector responsibility, such as retail plastic pollution.

“Why can’t we pressure big supermarkets like Woolworths to stop packaging most of their products in plastic?,” one chat commentator asked. “My recycle bin is full after two days of shopping at Woolworths. And yes, I should boycott them. I know some of you will say, but we don’t have enough fresh produce outlets for us to choose from.”

Green responded to that question, agreeing that single-use plastic was a major problem: “Food packaging in South Africa is crazy. Everything comes wrapped in cellophane that is really not worth recycling. So often, even if you put your recycling out, this is not taken by your informal recycler. You know, it ends up in the landfill that ends up in the ocean.

“We need to put pressure on our policymakers, on supermarkets, on ourselves, to move away from choosing single-use,” said Green, using the example of shoppers who took plastic off produce in the shops after paying for it so that the supermarket was forced to deal with it.

“I do think that we should, as consumers, use our voice more actively.”

Renwick agreed, emphasising the many components to global change to consider.

“And a lot of financial institutions, including our own, are building quite complex models to understand the impact of these businesses in their whole production cycle to the end consumer.”

Defending truth

Staying with the discussion’s critical frame, Walters noted that journalists needed values and principles, “which some interpret as ideology”. In this, she suggested that there was a tension within telling “the business story, the private sector story, critically, without becoming activists”.

Green responded, “Our Burning Planet is not an activist unit. First and foremost, we are journalists… We have to be committed to the tenets of journalism. And one of those is to report the truth, and then defend it.

“In our reporting on business, businesses will say one thing, the activists will say one thing — it’s not our job to quote them equally or both. Our job is to go out and find the truth.” DM/OBP

Absa OBP

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