Week 13: Unmasking the Real Predators of Climate Action and Financial Chaos

Dear all,

In this Easter Newsletter: Wolves are to blame. Some positive developments amidst the darkness. What “wolves” are doing in Peru! Are there any wolves left in Germany? And meet the real banking wolves, who literally couldn't care less about public opinion. Inside the finance industry, irritation reached a new level following the publication of an ECB paper in January. It revealed that 90% of the euro-zone banks analyzed are "misaligned" with the goal of limiting global warming to 1.5°C, a finding the central bank described as "staggering." The ECB pointed out that many banks rely heavily on clients in energy-intensive sectors for revenue. It examined six industries — power, automotive, oil and gas, steel, coal, and cement — and found that, on average, these exposures amount to 15% of their highest-quality capital, with "significant variation among banks." In essence, widespread losses on loans to high-carbon sectors could potentially erase a large portion of banks’ financial reserves. Defining what qualifies as part of the green transition remains an ongoing effort, even as lenders, including Barclays Plc, BNP Paribas SA, and Citigroup Inc., establish new investment and corporate banking teams for this purpose. In some cases, the financing of coal plants is even categorized under an ESG banner. Banks are seeking ways to retain clients across a range of high-emitting industries, from cement to shipping and aviation. HSBC has clarified that many clients within these sectors will only achieve net zero if emerging carbon-reduction technologies can be scaled effectively.

Wolves: Hungry. Bloodthirsty. Baring their teeth and encroaching upon Europe. Tearing through everything in their path, devouring EU climate goals for breakfast, and making a feast of corporate climate pledges. Chaos reigns as wolves indeed seem to be taking over, with bankers, oil magnates, and politicians appearing more like sheep in comparison.

Last year, Europe witnessed an unprecedented number of wolf attacks on livestock, totaling around 65,500 incidents. This surge is linked to the expanding wolf populations and their encroachment into agricultural domains, a trend noticed by the European Union authorities. Since 1992, the EU has actively protected these apex predators, culminating in a significant role for them within the bloc's ambitious 1 trillion-euro plan aimed at achieving climate neutrality by 2050. Predators like wolves play a crucial role in maintaining the balance and health of ecosystems, which, in turn, fortifies the region against the adverse effects of climate change. From once being targeted for eradication, wolves now enjoy the highest level of protection, leading to a remarkable recovery and growth in their numbers. This protective stance, while celebrated by conservationists, has sparked a debate among farmers who feel it has been overextended, leading to significant agricultural challenges and protests. This issue has also been politicized, with some leveraging it to oppose environmental policies.