Changing Finance: new this month – November

Our monthly round-up of news, ideas and initiatives related to transforming the UK financial system for people and planet, compiled by the Lab’s CEO, Jesse Griffiths.

Top story, of course: climate

After the COP26 announcements, we’re all asking:

Attention focused on the Bank of England in October, as MPs requested the Governor take more active steps to support the green transition. As the Bank examines how to change capital rules to incentivise climate action, here’s a bold proposal from Finance Watch. Campaigners are mad that the Bank is not yet penalising dirty assets.

Companies are also in the spotlight. Dutch pension fund ABP – one of the world’s largest – will divest its €15bn of fossil fuel holdings within 18 months and Standard Chartered faces a shareholder resolution demanding real plans to meet net zero. Yet Barclays has financed $5.6bn in new fossil fuel projects since January and HSBC has been leading lobbying to water down climate action. In fact, many banks following the Equator Principles are still financing fossil fuels.

It’s not just banks. The carbon footprint enabled by the UK pensions industry is bigger than the UK’s entire annual emissions. Common Wealth suggests ways we could make the insurance industry an engine of the green transition. Meanwhile, auditors have been told by investors to include climate risk in audits.

Some useful tools: Forests & Finance can show you which banks and financiers are supplying the $238 billion (since 2015) that is driving tropical deforestation. And the first global ‘oil and gas exit list’ was launched by NGOs at COP26 – naming the companies that are still driving oil and gas expansion (a companion to the coal exit list).

Most European banks are not well prepared for climate risks, says the European Central Bank. But a number of bankers from around the world are becoming internal climate champions: meet the climate safe lending fellows here.

Financial wrongdoing

Multinationals will finally get the chance to show they are abiding by tax rules as a new fair tax standard is launched – much needed as new research shows a $483 billion annual tax loss worldwide due to tax-dodging by multinationals and rich individuals. The UK is implicated here – it’s little wonder an expert on the Mafia brands it “the most corrupt country in the world” because of financial crime, and others say it’s a global fraudsters haven.

New research: nearly half of all corporate violations in the UK are committed by the finance sector. Here’s the new Violation Tracker UK website, a database of all companies that have broken regulatory rules and been caught.

Barclays’ CEO has resigned over links to Jeffrey Epstein – in just the latest in 10 years of Barclays scandals. And embarrassingly, the UK banking industry’s new small business compensation scheme has made only one pay-out to victims of banking scandals since 2019.

MPs have called for a new Economic Crime Bill to stop the UK’s property market being “at the heart of the world’s dirty money crisis”. The Insolvency industry is beset by conflicts of interest and needs major reform, too, according to a new APPG on Fair Business Banking report. And here’s a useful summary of the recent Parliamentary debate on Buy Now Pay Later (BNPL).

Here are the heroes in the fight against sub-prime lending sharks [paywall].

How is the finance system driving an increase in monopolies? Some ideas from the Balanced Economy Project.

Finally, private equity’s failings in the care sector are laid bare in this report from Transformative Responses to the Crisis.

Winners, losers and the future

Winners: millionaires have written to the UK Chancellor, demanding their wealth be taxed more.

Losers: the UK’s banking network shrunk by 5% between April and June, leaving over one-third of the UK population more than 2km from a branch. It’s set to get worse, with TSB’s plan to close one-quarter of its branches.

The future: Atom Bank has moved to a four-day week without cutting pay (although it’ll be a longer hour day).

And finally…

Economists grossly undervalue the future and thus the future lives of young people – an interesting piece on discount rates from Nick Stern.

Remember these shameful oil company ads?

How do people in different countries spend their time – and what does this say about living conditions?

How does your country score in the Happy Planet Index?