Climate chaos isn’t just a threat for the future. Indonesia announced last week that it is moving its whole capital from the sinking city of Jakarta to Bornea last week. Five million people are on the cusp of starvation in southern Africa.
Without drastic action wildfires, droughts, typhoons and hurricanes will only get worse. Now even the rich are waking up to the scale of the threat—or so it seems.
But the logic of capitalism—to always maximise profits—means we can’t trust them.
There is a widespread feeling that we need urgent action on climate change that CEOs can’t ignore. But their response amounts to little more than “greenwashing”—appearing more environmentally-friendly to their consumers.
Bosses at Heathrow Airport say that “growth cannot come at any cost”. They claim that “the aviation sector is committed to decarbonising and playing its part in reducing emissions to achieve a net-zero economy by 2050.
“Heathrow itself is decarbonising and its infrastructure will be carbon-neutral by next year.”
They don’t include in this the aircraft that fly in and out of the airport.
The vast majority of flights are taken by bosses and the rich. Some 70 percent of flights in Britain were made by 15 percent of the population, according to a study from 2014.
Their jet-setting lifestyles are just one example of how the rich overconsume resources.
So some rich people are greenwashing that too.
Bernard Arnault, Europe’s richest man, said his LVMH champagne and luxury brands group would stump up £9 million to fight the Amazon fires. He’s keen to greenwash after one of its arms was implicated in an Amazon scandal in 2009.
A Greenpeace report documented how big agribusiness, funded by Brazilian state-owned banks, were illegally clearing large parts of the rainforest.
The reason was not demand for meat products, but leather sold on the European markets to brands that cater for the rich. They included LVMH’s Louis Vuitton, Gucci, Boss and Prada.
The Amazon leather trade wasn’t just a by-product of beef production, but a driver of deforestation in its own right.
LVMH isn’t the only company promising it will help the environment when it has benefited from its destruction.
A group of investment bankers and millionaires have set up something called the Climate Emergency Fund. Members of the advisory board include Aileen Getty—of the Getty family that made its fortune from Getty Oil.
There is more than just hypocrisy at play here.
The Climate Emergency Fund goes further than stumping up money when extreme weather strikes.
It says it’s there to fund climate activism, from supplying megaphones and printing leaflets to paying for full-time staff for climate movement organisations.
Trevor Neilson, who describes himself as an investor and philanthropist, is heading up the new fund. He supported Extinction Rebellion’s (XR) International Rebellion, the week of occupations in London in April.
And he talks in radical language, saying, “We do not have time for gradualism”. “The fund will provide resources to grassroots activists who seek to disrupt in a non-violent way,” he said.
A spokesperson for XR said the move showed we’re near a tipping point. “In the past, philanthropy has often been about personal interest,” they said. “But now people are realising that we are all in this together and putting their money forward for our collective wellbeing.”
That’s not quite true of Neilson’s motives.
He set up the i(x) Investments fund in 2015 with Howard Buffett—grandson of billionaire investor Warren Buffet. The company’s slogan is “Profit with a purpose”.
What does that mean? And can it work to save the planet?
Neilson and Buffet acknowledge that capitalism is about making a profit. But the idea is that the individual choices of investors can make a difference for climate justice and the social good.
They argue that by taking a long-term view, capitalists can do the good thing and ensure a future for profit-making on the planet.
Neilson believes that “now is the time to stop investing in fossil fuels, which are largely dependent upon massive taxpayer funded subsidies”. So companies should “direct their investments toward renewable energy, a sector that offers more attractive returns”.
The model is highly profitable for i(x) Investments’ business model.
They make a lot of the fact that i(x) isn’t an investment fund—a business that buys and sells companies to make a quick return. Their holding company model invests in new, environmentally-friendly companies, keeps hold of a stake and reinvests the profits.
This gives i(x) long-term interest payments—and allows the company to defer a hefty tax bill.
And it’s likely to make Neilson and Buffet quite rich. But it’s not going to achieve Buffet’s other stated ambition—“It’s about taking the potential for capitalism to the next level.”
There are limits to how profitable being green is across capitalism—and it ignores how central fossil fuel production is to the system. As The Economist magazine writes, “Companies going carbon neutral are mostly consumer-facing ones rather than intensive emitters.
“Money for coal may be scarce, at least in the rich world, but institutional investors own a sizeable chunk of the world’s major oil companies.”
There’s also a more fundamental barrier to the rich saving us from climate catastrophe—the competition of their capitalist system. The aim of capitalist firms is to maximise profits—and this takes place at the expense of planet and people.
Individual capitalist firms don’t maximise profits because their CEOs or shareholders are greedy or want to maintain a luxurious lifestyle.
Competition acts as a coercive force on capitalist firms and capitalist states—and means their investment choices are down to profit or loss.
The choices of individual capitalist firms may have disastrous consequences for society as a whole. And they may even endanger the very future of the capitalist system itself.
But if they don’t try and grab a bigger slice of profits, they’ll be driven out of business by a competitor. The threat of this capitalist logic is summed up by the new “scramble for the Arctic”.
Donald Trump’s bid to buy Greenland from Denmark may have seemed like another wacky move by the US president. But there is real competition between the US, Russia and other powers for the region.
A lot of it has to do with the Arctic ice caps melting, meaning it’s easier to drill for oil and gas.
Competition places limits on what the state will do to rein in fossil fuel capitalists.
Sometimes capitalist states have placed restrictions on individual capitalism firms for the long-term benefit of the system as a whole.
And sometimes the working class and mass movements have forced the state to impose rules on private capitalists.
If that wasn’t the case, there would still be child labour and hardly any workers’ rights.
Reforms to tackle climate change are welcome. The Green New Deal is a package of measures proposed by politicians in a number of countries this is said to tackle the climate crisis. It’s also a nod to the US New Deal of the 1930s that followed the Wall Street Crash.
Then, significant sections of capital were willing to accept increased state control because it promised to restore profitability in the long-term.
They will not push for the sort of transformational changes needed to decarbonise the economy. A package of state-led reforms would quickly come up against how central fossil fuels are to modern capitalism.
There’s a second barrier to stop the state reining in private capitalists—that there is no national solution to climate change.
Norway’s parliament recently passed a motion saying it would not drill for oil in the arctic and leave billions of barrels of oil in the ground. The state-owned oil company bosses kicked up a fuss, but the legislation still passed.
But global competition means other countries are still getting a slice of the action in the Arctic.
There would be no capitalism on a dead planet, and even the rich will feel the effects of climate change.
But the logic of capitalism means the system drives the planet to destruction for the sake of profit. Either we take down capitalism—or it takes us all down with it.
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