She Invests #7: Financial Activism

A photo of a group of activists posing with their signs
©Amazon Watch

Welcome to She Invests, a monthly newsletter on women, money, and investing. This is newsletter #7! If you have not seen the first six, please click hereherehereherehere, or here. Thank you for reading and sharing. So far 16,000+ subscribers and I thank you all! If someone is sending this to you, please subscribe.

If you have been reading this newsletter or any of my other articles, you know that I am all about how you can use your financial resources (what you spend/invest/give) in alignment with your vision and values to create positive change. I call it financial activism. Every person can engage in financial activism, and in fact, you already do. How so? Think about it this way. Each time even a single dollar travels from your possession to someone else’s, it is a transfer of financial power. If you buy a coffee from Starbucks, you are supporting that company and what it stands for. If you shop at Walmart for your food versus your locally owned grocery store, same thing. Of course, it isn’t feasible to research every single thing we do with our money, so the invitation is to just do something. And then do something more. It is all about knowledge and intention.

In time, via this newsletter and a platform I am working on building, I want to help you do more things, especially as it relates to aligning your financial resources around the advancement of women’s rights and gender equity. I also want to highlight other groups, organizations, and people who are doing amazing things to help make our world more safe, sustainable, and equitable. One such group is Amazon Watch. I came to know about this organization because one of my best friends in the world, Kathy LeMay, became their Director of Philanthropy one year ago. Amazon Watch’s mission is to protect the rainforest and advance the rights of Indigenous peoples in the Amazon Basin. I could tell you about how they literally do lifesaving work every single day in support of Indigenous leaders in the region, but that is not what this article is about. This article is about financial activism, and the work Amazon Watch does in support of our planet by trying to hold financial institutions accountable for what they say they stand for. And this should matter to all of us, because it can help inform our choices on with whom we choose to do our financial business. Read on.

Earlier this month, Goldman Sachs, Wells Fargo, and Citigroup unveiled plans to align their lending portfolios with the Paris Agreement and achieve net zero carbon emissions. Since September, Bank of America, JP Morgan Chase, and Morgan Stanley have all made similar pledges, meaning the six largest banks in America have all publicly committed to fighting climate change. You would think that this would be a good thing, but instead, many activists are calling this just the latest example of “greenwashing” in the finance industry. Meaning these announcements are more about bolstering the banks’ public facing reputation, with little in terms of substantial action plans to back it up. And sadly, it seems these activists may be right.

JP Morgan Chase is the biggest bank in America. According to Amazon Watch, in October of last year, they announced the creation of a Center for Carbon Transition, with the goal of achieving net zero carbon emissions by 2050. That certainly deserves a shout out. The bank also invested over $14 billion in green projects and sustainable investments, the most out of all the American banks. And that all sounds well and good until you discover that they have also invested between $63b and $70b per year in the fossil fuel industry since 2016. That’s an investment rate of nearly 5x their much ballyhooed green initiatives. As a client of JP Morgan, it is my job to ask them to explain how and why they are doing both. And I will.

Amazon Watch also offers the case of BlackRock, the world’s largest asset manager with over $9 trillion under management. I just need you to process that number again. $9 TRILLION. In January, BlackRock announced their commitment to achieve net zero carbon emissions by 2050, and just last week, in a series of memos, they encouraged the companies they invest in to adopt “no deforestation policies, to account for biodiversity in their operations, and to obtain the free, prior and informed consent (FPIC) of indigenous peoples for initiatives that affect their rights.” And yet, despite all this posturing, BlackRock has still not unveiled any sort of accountability measures, and they remain one of the world’s largest investors in the fossil fuel industry and industrial agricultural commodities linked to deforestation, two of the biggest factors in our current climate change crisis.

In a recent interview with Vice, Moira Birss, climate and finance director for Amazon Watch, was quick to point out the hypocrisy of these types of actions. “If you are putting fossil fuels in the atmosphere, you are part of the problem. With financial firms, we cannot allow investment in green energy to make up for continued investment in fossil fuel extraction and expansion, as well as deforestation,” she says. And of course I agree. But I also want to acknowledge that some action is better than no action. There are many firms that are doing nothing instead of something, and what we should want to know as consumers is who is doing the most, who is doing something, and who is doing nothing. Frankly, it is really hard to know who is doing what, and that is why we need groups like Amazon Watch to help us figure it out.

Because the thing is, Amazon Watch knows what they’re talking about. For the past 25 years, they have protected the rainforest and advanced the rights of Indigenous peoples in the Amazon Basin. They partner with Indigenous and environmental organizations in campaigns for human rights, corporate accountability, and the preservation of the Amazon’s ecological systems. In fact, just last week, Amazon Watch facilitated an open letter to BlackRock, in which they called out the firm’s failure to respect the land rights and human rights of Indigenous Peoples and local communities. This letter was signed by over 80 world renowned Indigenous and local activists.

What’s amazing about Amazon Watch is that they use financial activism to hold banks and corporations accountable for their actions on climate change, and they do their work primarily through supporting local activists on the ground. And they get results. Earlier this year, Amazon Watch scored a major victory when three top EU banks announced that they would no longer include new Ecuadorian Amazon oil in their trading activities. This was a major development in the fight against climate change, and a big win for financial activism. In light of this, I reached out to Amazon Watch to learn more about how this came about.

What led to the recent announcements from some EU banks regarding oil trade financing?

This summer, Amazon Watch teamed up with Stand.earth to produce a detailed report that exposed the ways that some leading European banks finance oil trading from the Ecuadorian Amazon. Out of the 19 banks assessed in the report, the top six banks – ING, Credit Suisse, UBS, and BNP Paribas Group, Natixis, and Rabobank – account for 85 percent of all banks financing trade of Amazon oil. This is despite these banks having policies on advancing human rights, protecting biodiversity, and addressing climate change. Therefore, our report called on banks to to do the following:

  • Stop financing Amazon oil-related activities, including trade, unless adequate remediation of contamination occurs, rights to health of local communities is guaranteed, safeguards are in place to prevent future spills, and governments in the region commit to no new expansion of oil development and a wind-down of existing wells in line with global climate goals and collective Indigenous visions for the region;
  • Focus investments on opportunities in Ecuador and other countries in the Amazon and world that truly meet responsible banking commitments and respect Indigenous rights
  • Expand policies to exclude all Amazon-derived oil from project and trade financing until all Amazon basin countries commit to no new expansion of oil development and a wind-down of existing wells in line with collective Indigenous visions for the region and global climate goals.

Amazon Watch and Stand.earth have been in communication with some of the top financiers identified in the report since it was published, and in January, BNP Paribas, Credit Suisse, and ING committed to the immediate exclusion of new Ecuadorian Amazon oil from their trading activities. More information is available in this press release on the announcements.

How does this relate to Amazon Watch’s advocacy with BlackRock, and what is BlackRock’s involvement in Amazon destruction?

BlackRock is an asset manager, not a bank, and as such, its support or involvement with industries driving the destruction of the Amazon and our climate looks slightly different from that of banks. Instead of lending and underwriting trade deals, BlackRock invests in many of the companies currently operating in the Amazon through purchases of stocks and bonds. We know that the two largest drivers of climate change are fossil fuels and deforestation, and that Indigenous peoples are the best land protectors. As the world’s largest asset manager, BlackRock (as well as other big asset managers) has a powerful role to play in decarbonizing our future. And what this looks like is no longer investing in the fossil fuel industry, and engaging deforestation-risk commodity companies to ensure that they prioritize Indigenous rights and remove deforestation from their supply chains. 

Amazon Watch and APIB (Association of Brazil’s Indigenous Peoples, in English) have been engaging with BlackRock since 2019. We have also recently begun to engage with Vanguard, in order for their executives to understand first-hand that their investments and financing have devastating impacts on the lives of Indigenous peoples across the Amazon.

According to APIB’s research with Amazon Watch, BlackRock continues to be one of the biggest funders of Amazon destruction, holding $9.2 billion in mining, agribusiness, and energy companies that are complicit in conflicts affecting Indigenous peoples and their territories across the Brazilian Amazon. In early 2020, Amazon Watch published another report that showed BlackRock has $2.5 billion invested in crude oil companies operating in the Western Amazon. Previous research from our allies at Friends of the Earth showed that BlackRock has been the top investor in deforestation-risk commodities worldwideUnfortunately, BlackRock has yet to respond to our findings.

We believe that BlackRock has outsized complicity in climate destruction and is well aware of the violations of Indigenous rights that its investments perpetuate. BlackRock executives have heard directly from our Finance team, and from Indigenous leaders from APIB and across the Amazon, about the level of violence they face and the out-of-control destruction happening in the rainforest.

What is your campaign calling on BlackRock to do, and how have they responded?

In 2020, BlackRock hinted it would take new approaches on deforestation and biodiversity in 2021, and yet its new net-zero by 2050 commitments failed to provide any concrete measures on how the company plans to conduct due diligence on Indigenous rights and deforestation risks. This is a big gap, since “net zero” is a vague term that sometimes is interpreted to include false solutions to climate change that harm forests and Indigenous peoples, like forest offsets. Our allies at the BlackRock’s Big Problem campaign laid out several of these gaps in their analysis of this recent announcement from BlackRock.

Indigenous peoples are critical players in protecting the Amazon rainforest and slowing down climate change, so they need to be at the table to discuss a deforestation and Indigenous rights policy. Any attempt at climate mitigation or “net zero” policies must incorporate the voices, perspectives, and needs of Indigenous peoples. Together with allies involved in the BlackRock’s Big Problem campaign, we have outlined a set of principles that a policy on Indigenous rights and deforestation should incorporate.

As detailed in a public letter sent from APIB leadership to BlackRock executives in early January 2021, it has been difficult for Amazon Watch and APIB to get BlackRock to meet. The pandemic has not held us back from engaging, as we are open to a virtual meeting. Since the letter was sent, APIB was invited to a meeting with executives in charge of BlackRock’s direct engagement with companies. This is encouraging, though it’s notable that the invitation does not include executives in charge of developing the details of BlackRock’s net-zero commitment, which will have major impacts on forests and Indigenous rights, or others in charge of BlackRock’s overall investment management. In this context, we are unsure if the voices and perspectives of APIB and Amazon Watch will be listened to.

BlackRock must take action as soon as possible, as we are facing multiple crises in the Amazon right now. BlackRock is running out of time to make meaningful changes for the rainforest and our climate.

If you want to read about this further, please check out this article in Mongabay.

Now, I know that there are a lot of big numbers being thrown around in this piece. Maybe you’re thinking that this has nothing to do with you because you don’t have investment assets, or maybe you think that what you do have is too small to make a difference. And if you are thinking that, I can assure you that it all matters. As stated above, every single financial transaction we make every single day is a transfer of power. From the clothes you buy, to the food you eat, to the place where you get your morning coffee. Every single time you exchange money for goods or services, you are leveraging your power as a consumer, and that leverage can be used for good. I’ve written before about how you can use your investments to promote racial and gender equity. Why should climate change be any different?

Of course, I am very much on this journey myself, and I am FAR from perfect in making sure that my financial resources are fully aligned with my values. I am quite sure that I own some fund or some ETF that is invested in something that I would not be proud of. But what I also know is that I am trying to chip away at that alignment every single day. And here is the good news as it relates to investing, in that research shows that impact investing yields greater returns on your investment than those made without that lens. So when you really think about it, it’s a win win.

In terms of the financial services firms we choose to work with and the investment products we choose to invest in, it is becoming easier to pick ones that are transparent and accountable in terms of what they stand for. There are dozens of options for environmentally friendly and sustainable banks and credit unions. You can even search for banks that refuse to invest in fossil fuels full stop. As for any of the banks mentioned above, if you are reading this, are from one of those institutions, and disagree with what is written here, please feel free to comment. And if you want to talk to anyone at Amazon Watch, I would love to connect you. My purpose in writing this piece is to bring awareness and accountability around stated commitments, and not to shame and blame. I believe that most people, even bankers, care about our planet, and that we all want to do the right thing to take care of our world.

At the end of the day, money truly makes the world go around. And the sooner we all realize the potential contained within that, the sooner we can all start using that power to shape a better world. No matter what your net worth, whether you are a billionaire investor with BlackRock, a person with $20 in their pocket looking to open their first bank account, or anyone in between, the choices we make about where and to whom we give our money can make a difference. So the next time you hand over legal tender, I urge you to ask yourself, “How can this transaction be used to make the world a better place?” The possibility is there, every single time.

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