We are entering a new era of environmental enmity. A time when environmental exhortations supersede almost anything else. A time when impolitic words, deeds or decisions by financial institutions have outsized social consequences. And the least imprecision on climate or the environment could imperil positive economic performance. In the pervasive context of climate change, environmental activists are working to penalize banks for doing their core business – lending money.
In November 2022, the SEC fined Goldman Sachs Investment Advisor $4 million for failing to follow its policies and procedures on ESG investments.In October 2022, the U.K.'s Advertising Authority banned HSBC from advertising certain investments claiming they could mislead consumers. But tactics have been shifting in recent years. Class-action lawsuits, proxy battles, shareholder actions and intensive media campaigns are now quite common.
In trying to shift the tenor from sustainable to sinister, activists miss the larger point. Financial institutions have embraced environmental sustainability in a big way just on their own terms, committing billions to reduce their credit exposure to oil and gas and comply with international conventions like the Paris accord.