Extinction Rebellion is on the money. The climate movement’s return to mass action on 23 August will turn its sights on the City of London—the financial district in the centre of the capital.
From its skyscrapers and guildhalls, bankers and spivs handle the billions that pay for the world’s oil wells, coal mines and gas pipelines. They’re the ones who fuel the fossil fuel industry.
“Ultimately the City of London and money is like the blood flowing through the veins of the system,” Andrew Medhurst, a former City banker turned climate activist, told Socialist Worker.
“The banks provide the money and the insurance companies insure the projects. If the banks and insurance companies stopped this then the fossil fuel industry would be one step closer to teetering on the brink.”
It certainly would. If the City was a country, it would be the ninth biggest emitter of carbon dioxide—or CO2—in the world.
That’s according to a report by charities Greenpeace and WWF, who estimated that British banks and asset managers financed 805 million tonnes of CO2 in 2019. This, says Greenpeace, “is just the tip of the iceberg.”
Estimates were based on public information released by just the top 15 banks and ten asset managers in Britain. It also said it couldn’t calculate the impact of some forms of finance such as insurance, due to a lack of public information.
All this means that “the true extent of the carbon emissions funded by the UK’s finance sector is expected to be far greater.”
London is by far the biggest insurance market, says Greenpeace. So the carbon emissions enabled by insurance provided by British banks will be “substantial.”
Some figures we do know.
We know, for instance, that Barclays is the largest funder of fossil fuels among European banks—and the seventh largest in the world. Its total funding for all fossil fuels between 2016 and 2018 was over £85 billion.
HSBC isn’t far behind. It’s the second largest funder in Europe, at some £63 billion. Both banks are also among the top ten highest funders in the world of the tar sands, arctic oil and gas, and offshore oil and gas industries.
But don’t let the other banks off the hook. The annual report that collects this data—The Fossil Fuel Finance Report written by a number of NGOs—praised the Royal Bank of Scotland. This is because it has spent less than most other banks on funding fossil fuels since 2016.
It has still spent nearly £9 billion since then. That includes nearly £2 billion on fossil fuel expansion—efforts by businesses to exploit new fossil fuel reserves.
This is a practice the report calls “simply indefensible.”
In fact, since 2016—when the Paris agreement sought to limit global heating to 1.5 degrees Celsius was signed—bank financing for fossil fuels has increased each year. What’s galling is that all of those banks profess to know the damage that the fossil fuel industry is doing.
Most of them have made some sort of slippery commitment to reducing their emissions. But they do this while giving themselves loopholes and free passes to carry on lending and investing.
As long as there is money to be made from fossil fuels, competing banks and investment companies will want to grab a share of the profits. None of them plan to miss out.
And while the banks and investment companies keep the funds coming, the fossil fuel industries will keep digging, drilling and burning.
That’s why breaking the cycle has to mean more than reforming banks, or choosing the “good” ones. It has to strike at the profit system itself.
After spending 30 years as a trader—a career that included high up positions for HSBC and Lloyds—Andrew jacked in the job in 2018.
“I did not feel comfortable working in a pension scheme telling people to save for 20 years when society’s collapse is imminent,” he said. “It felt like mis-selling at its worst.
“Capitalism in its current guise is destroying itself, and it’s taking a liveable planet for most of humans on the planet with it.
“The only way you repay debt is perpetual economic growth. We’re already using many more resources than the Earth can sustain.”
“It’s the system that’s broken,” he added. “We all know we’ve got to keep oil and coal and gas in the ground, but it seems HSBC and Barclays are continuing to fund fossil fuel projects to the tune of billions of pounds.
“So that’s why Extinction Rebellion may target Barclays and HSBC—they are the worst in the league for funding fossil fuel projects. But all companies are complicit because all are involved in this.”
The City is the third biggest financial centre providing loans to the coal industry, after Japan and the US.
British banks together loaned nearly £16 billion to coal industry companies between October 2018 and October 2020.
Add on the amount that the five main British banks provide to coal companies through underwriting in the same period, and that figure becomes £40 billion.
Then there’s the cash coughed up by British investment companies—£34 billion. Again, that makes British institutions the third largest investors in coal, after the US and Japan.
The City is a strange place—almost literally a law unto itself.
At the size of a square mile, the City has its own police force. More to the point, it’s the only place in Britain where businesses don’t just get a vote in its local elections, but more votes than people do.
Of the few people who live in the City—about 8,000—each gets a single vote. Businesses get allocated several votes each depending on how many people work for it.
Not that the workers get a say in where those votes go, as it’s the bosses that cast them.
That—and the fact that the elections are for something called The Corporation of the City of London—should be a sign of what’s going on here.
This is a literal bosses’ club. Its workings are deliberately opaque and exclusive.
There are four layers of representatives—common councilmen, aldermen, sheriffs and the Lord Mayor.
Most of the positions go uncontested. This is usually the result of an agreement before the election takes place, and it’s not the done thing to stand for a party.
If you want to stand for election, you first must be a freeman of the City of London, which means being approved by an alderman. That in turn usually means having to be a member of one of the City livery companies—guilds.
Some of them claim medieval roots—the Worshipful Company of Cordwainers for instance. Others, such as the Worshipful Company of International Bankers, are a bit more modern.
Only the livery companies can elect the sheriffs from the aldermen, and to become Lord Mayor you have to have been both. You also must have lots of money. But there’s more to this than silly names and even sillier clothes. It all serves a purpose.
A big part of what the Corporation does is manage its giant pool of cash—its 800 year old “endowment fund.”
Despite being a public body, exactly how much money is in the fund is private—usually said to be in the billions.
Some of this it spends on the land it has bought up. Most of it is spent lobbying on behalf of banks, businesses and financial institutions to help them to avoid tax and regulations.
The Corporation even gets to appoint a representative to parliament—the Remembrancer. It’s their job to make sure nothing gets passed that damages the special rights and privileges of the City.
Again, this isn’t just some throwback to older times. It reflects the actual role of the City and its importance to the British state.
During the British Empire, the City established its central role as the place where the slavers and plunderers could be financed. It was also the place where the loot and profits of the Empire could be traded and speculated on.
It kept its importance by making sure it stays the place where the world’s rich go to trade, lend and speculate.
This is very important to the British government, which celebrates that financial services “contributed” £132 billion to the economy in 2019. That’s about 7 percent of total economic output.
The Corporation of the City of London says this is exactly why the banks and businesses there should stay as untaxed and unregulated as possible.
But if this is where the bosses rake in their cash, then it’s also where they set the prices that make basic commodities unaffordable to millions of people across the world.
It’s where they buy up the land that drives up housing prices. It’s where they gamble so recklessly with each other’s debt that they trigger financial crashes.
And, of course, it’s where they cough up the money that funds the climate crisis.
If beating that crisis means taking on the City of London, it also means taking on the whole global system of capitalism.