Page 39 - Insurance Times November 2022

The effects of biodiversity loss on many high-income countries DeSmog's analysis found 65 percent of directors from 39
are also more difficult to assess. While the GDP dependency banks had 940 past or current connections to industries that
of these countries on biodiversity and ecosystems services could be considered climate-conflicted.
tends to be smaller than in developing countries, it is not
negligible, and given the already highly depleted status of
Directors with affiliations to companies involved in
their ecosystems, the risk of partial ecosystem collapse for
extracting oil, gas and coal - the world's most polluting
these countries is comparatively high."
energy sources - were well-represented across bank
boardrooms, with 16 percent of all board members having
In other words, figures in the reports are probably an
current or previous roles in the polluting energy sector.
underestimation of real risks. It would, therefore, be
important for Central Banks to do the same kind of exercise
There were also significant ties to banks and investment
on bank exposures. The Dutch Central Bank builds scenarios
vehicles supporting polluting industries, as well as to think
to assess impact of biodiversity loss on financial sector.
tanks and lobbying groups with a history of campaigning
against climate action.
Decarbonising reserve funds: Singapore
way
"Having its fingers in all the pies allows the fossil fuel industry
The Monetary Authority of Singapore (MAS) has announced
to quietly put its thumb on the scales of institutional decision
a plan to decarbonise its US$300bn reserve fund, amid
making, helping delay action and protect the status quo."
increasing global interest in the climate footprint of central
banks' foreign exchange (forex) portfolios.
What about the retail customers?
In a speech in late July, managing director Ravi Menon Are you funding global warming every time you make a bank
revealed that the MAS will instruct external fund managers deposit? If you are with one of the major banks, your money
to integrate climate change considerations into their is likely to be funding fossil fuels. Here's how to find out more
investment process, and work with other shareholders to and consider making a switch.
ensure portfolio companies have robust transition plans.
Climate & Capital Media is partnering with the climate
In measures due to take effect next year, the MAS will also
fintech startup, GreenPortfolio, to support
tilt its equities investments towards climate-friendly
greenportfolio.com's efforts to bring transparency to the
companies, and exclude equities and bonds from companies
relationship between finance and climate change for
deriving more than 10% of their revenues from thermal coal
American consumers.
mining and oil sands. Menon said that as a result of its
actions, the central bank expects to reduce the weighted
What happens to your money when it is deposited in a bank?
average carbon intensity of its equities portfolio by up to
Chances are you never worry about it as long as you think
50% by 2030 against a 2018 baseline.
your money is safe. But as the global climate crisis escalates,
The forex reserves of central banks are increasingly being you may want to take a closer look at your bank and
scrutinised over their climate impact and potential role in whether it is using your money to fund fossil fuel projects
the net-zero transition. A recent paper from the Inspire worldwide.
research network stresses the important example that
central banks can set through their reserves management According to banking watchdog BankFWD and the
for other actors in the financial sector. Rainforest Action Network (RAN), the top 60 U.S. banks have
provided $4.6 trillion to the fossil fuel industry since 2016.
Sanitising fiduciary space Compare that to the $203 billion in bonds and loans that
have gone toward renewable projects - a mere 5% of what
The majority of directors at the world's biggest banks have
affiliations to polluting companies and organisations, a has gone into fossil fuel financing. Even as the International
DeSmog[vi] investigation shows. The findings raise concerns Energy Agency (IEA) has made it clear that there can be no
over a systemic conflict of interest at a time when the new coal, oil and gas projects to remain below 2 degrees
international financial sector is under increasing pressure to Celsius of warming, banks continue to provide a staggering
stop funding fossil fuels. amount of cash to finance them.

34 November 2022 The Insurance Times