Faced with the climate emergency, the world of so-called “green” finance is multiplying ethical, eco-responsible, sustainable investments… The reality? A system of absolute cynicism well hidden behind Greenwashing operations. Uplifting.
While global warming is accelerating and natural disasters follow one another at an absolutely frenetic pace, scientists and activists have been proclaiming it loud and clear for years: we must radically change the model of society. Faced with these claims, the world of economics seems to be questioning itself.
The textile industry has embarked on the sustainable; that of food, in organic farming. And finance? She intends to become greener. In recent years, the growth of funds and investments labeled “sustainable” has been exponential.
Between 2014 and 2017 alone, the market for these investments almost tripled. And don’t think that the Covid-19 pandemic has slowed the pace for these funds, quite the contrary. In September 2020, nearly 800 funds labeled “sustainable” experienced growth of 70%, with an outstanding volume (Editor’s note: outstanding is the total amount of credits issued by one or more financial institutions on a given date and unreimbursed) of more than €300 billion.
A new El Dorado, which gives the opportunity for the banking sector to restore its image after the financial crisis and the repeated tax scandals of recent years. What do we really find under the varnish of these attractive products and communication campaigns?
As the authors of Finance washes greeneran edifying documentary broadcast this evening on Arte, what they discovered by confronting the financial players with the reality of their “leaves speechless”. The master word ? Greenwashingor greenwashing.
Impunity and opacity
Because these so-called “green” investments, supposed to feed only responsible companies, reveal a whole galaxy of companies not really renowned for their ecological image: Dassault Systèmes, Coca-Cola, Exxon, TotalEnergies… In this nebula, the industries petro-chemicals occupy a place of choice.
Romain Girard and Matteo Born, the directors of the documentary, then develop their fascinating reflection with two staggering examples. We will limit ourselves to mentioning that of Belgian society Umicore, specializing in metal recycling. In the 1980s, it managed the processing of heavy metals in the mines, in particular to exploit lead.
The former Saint-Félix de Pallières mining site, located in the Cévennes, and closed for 40 years, still remembers it… Over the years, the company has left thousands of tons of toxic residues in the forests of the Cévennes, contaminating the soils and waters of all the surroundings. And if it is now (a little) active in cleaning up the dramatically polluted area, the site will take years, when the damage is already done.
These residues have caused cancer in animals and humans living in the vicinity. Once happy owners of houses in the middle of nature, they only have their eyes to cry: they are now unsaleable or almost.
Point Prod
The site of the Belgian headquarters of the company, located in Olen, is not better off… Here, it is downright a mountain of radioactive waste of 265,000 m3, which surrounds the site, to the point of making it the largest landfill in Belgium. The problem is also a huge pebble in the shoes of the authorities, because Umicore weighs heavily: 8 billion €. Forcing it to clean up and depollute the area would cost billions of euros, and would put the company out of business…
Despite this heavy liability and the nebulous explanations of the company’s communication department, Umicore is among the most appreciated companies in these green investments. How is it possible ? Thanks to the role of extra-financial rating agencies.
These help companies to be included in these “green” labeled investment funds by assigning them ratings, based on social and environmental criteria, grouped under the acronym ESG: Environmental, Social, Governance. The problem is that these evaluation criteria do not meet any standard; and they vary from agency to agency…
An opportunistic and cynical system
It does not matter that the banks, which invest in these funds, use all sorts of terms to surf on the ecological trend to better reassure those who commit their money, between “100% organic”, “ethical”, “eco- responsible”… In the end, the opacity remains behind this vaguely ecological pedigree.
In 2020, the all-powerful Deutsche Bank boasted in its annual report of managing the astronomical sum of €459 billion placed in “sustainable” funds. An absolute record. But the banking establishment has been caught in the eye of the storm for a while. Tuesday, June 1, searches in an investigation into investments sold as more durable than they were in reality were carried out.
Justice has, to date, found “indicates that, contrary to what is stated in the sales prospectuses of the funds” promoted as “sustainable” and managed by DWS [NDR : la filiale de la Deutsche Bank], ESG criteria have not been taken into account in a large number of investments”.
The alert was given by Desiree Fixler, the former head of sustainable development at DWS, who also testifies in the documentary Finance washes greener. His testimony is all the more interesting in that it predates the very recent judicial development of the case. Fired for her good and disloyal services in the eyes of management, she became a whistleblower. Green finance? “It’s just a market based on rhetoric, not evidence” she asserts. Something to think about…
“Finance washes greener”, documentary by Romain Girard and Matteo Born, broadcast this June 7 on Arte. Also available on arte.tv until July 6, 2022.