6 ms·

European Investment Bank to phase out fossil fuel financing

75 points by hekocelsius 7y ago

Bostonian 7y ago
The European IBank is an arm of the European Central Bank. The mandate of the ECB is to provide a stable currency, not to combat climate change. That is something for the European parliament and the governments of EU countries to tackle.
- et2o 7y ago
  That is not the mandate of the EIB and has never been. From their website: “The European Investment Bank is the lending arm of the European Union.” From the first paragraph on Wikipedia: “As a ‘policy-driven bank’ whose shareholders are the member states of the EU, the EIB uses its financing operations to bring about European integration and social cohesion. It should not be confused with the European Central Bank.” About their mission: “ As the ‘Bank of the European Union’. the EIB's mission is to make a difference to the future of Europe and its partners by supporting sound investments which further EU policy goals.” So this is exactly the kind of thing they do.
- rsynnott 7y ago
  Where’d you get that? The EIB is from the 50s, and includes non-ECB countries. It’s not an arm of the ECB.
- H8crilA 7y ago
  "Development banks" have more of a fiscal than monetary responsibility. Just like with IMF which is supposed to keep the world's monetary system stable (more like central banks/monetary side of things), and the World Bank which is supposed to induce progress (more like governments/fiscal side of things).
spodek 7y ago
Soon decisions like this won't make headlines because it will be normal not to invest in industries based on increasing suffering. Do we support investing in blood diamonds, no matter how profitable?
- H8crilA 7y ago
  $XLE for those that want to pick up cheap stocks. Till there's a global solution to the energy problem we'll need oil. Existing solutions are nowhere close to being sufficient, therefore divestment will have no impact on the amount of oil burned. It's ridiculous to think that clicking a sell button on some assets will fix global warming, that's not how the world works. https://en.wikipedia.org/wiki/World_energy_consumption https://en.wikipedia.org/wiki/World_energy_consumption As Bill Gates says, we need to fight two fronts of misinformation: a) that global warming is not a problem, and b) that it is an easy problem.
  - maest 7y ago
    > $XLE for those that want to pick up cheap stocks. A nuance is that you don't want to buy into these stocks while people are moving away from vice stocks. However, once the trend is stabilised and there are no more marginal investors to adopt a vice-free portfolio, then you should buy all the vice stocks as they will have a more favourable discount rate.
    - H8crilA 7y ago
      It's already the cheapest segment of the S&P 500: https://www.gurufocus.com/sector_shiller_pe.php https://www.gurufocus.com/sector_shiller_pe.php Timing the exact bottom is hard.
    - scarmig 7y ago
      I remember immediately after Deepwater Horizon, RIG dropped something like 50% to $40 a share or so. I invested heavily in it, proud of my own savviness and cynicism. That worked out well.
      - perl4ever 7y ago
        I found that investing in BP when people were at their most pessimistic about the well being capped did work well. Unfortunately, following up that success by buying into TEPCO once it had dropped by half after their accident turned out not to be a good move. However, one may console oneself that it was a public service in providing some cash to the Japanese pension funds, proverbial widows and orphans and whatnot that were selling at that time.
solarhoma 7y ago
For the past five years O&G E&P companies have been realizing significant loses in a shale driven production world. Where NA producers are quick to turn on the taps and drown the market in oil once $WTI hits $55/bbl. with this comes instability and loss of Wall Street backing. Banks are labeling this as a way to show them in a good light. I.e. ‘fight climate change.’ The actuality is that the want better returns in a more stable environment. I apologize for poor formatting on my phone.
- armSixtyFour 7y ago
  Exactly this, and if looks good from a social perspective that's just an added bonus.
jobigoud 7y ago
The contrast with the other front page article "Paypal stops payouts to pornhubs models" is interesting. On one hand we don't like it when banks use their power to implement their moral panic regarding otherwise legal activities, on the other it's nice that they use it to avoid financing things we consider bad for the commons.
- armSixtyFour 7y ago
  My guess is there's more to it than that. I think that they have less confidence in the financial prospects of those projects as well.
- bildung 7y ago
  One categorial difference is that the Paypal case is discrimination against individuals.
- Ogopogostick 7y ago
  It's worth remembering that the commons isn't well defined either. Lots of people view the current policy proposals of environmentalism as anti-poor and handouts to the third world. Whether you agree with that framing or not, there is plenty of data that shows mitigation and not outright prevention is an equally valid strategy to climate change. What you're really saying is that it's okay this time because it's an issue you agree with, a more neutral framing would be "...it's nice that they use it to avoid financing things we consider bad."
- ATsch 7y ago
  Not sure what's supposed to be interesting about that. It is good when good things happen and bad when bad things happen, yes. We don't need to lock ourselves into some kind of universal ethical conclusion here.
  - journalctl 7y ago
    They’re also entirely different issues. One is about handling to payment for people who are not really harming anyone (or at least not doing massive environmental damage). The other is... doing massive environmental damage. Cool, so I guess we just downvote stuff we disagree with.

75 points by hekocelsius 7y ago

The European IBank is an arm of the European Central Bank. The mandate of the ECB is to provide a stable currency, not to combat climate change. That is something for the European parliament and the governments of EU countries to tackle.

et2o 7y ago
That is not the mandate of the EIB and has never been. From their website: “The European Investment Bank is the lending arm of the European Union.” From the first paragraph on Wikipedia: “As a ‘policy-driven bank’ whose shareholders are the member states of the EU, the EIB uses its financing operations to bring about European integration and social cohesion. It should not be confused with the European Central Bank.” About their mission: “ As the ‘Bank of the European Union’. the EIB's mission is to make a difference to the future of Europe and its partners by supporting sound investments which further EU policy goals.” So this is exactly the kind of thing they do.
rsynnott 7y ago
Where’d you get that? The EIB is from the 50s, and includes non-ECB countries. It’s not an arm of the ECB.
H8crilA 7y ago
"Development banks" have more of a fiscal than monetary responsibility. Just like with IMF which is supposed to keep the world's monetary system stable (more like central banks/monetary side of things), and the World Bank which is supposed to induce progress (more like governments/fiscal side of things).

spodek 7y ago

Soon decisions like this won't make headlines because it will be normal not to invest in industries based on increasing suffering. Do we support investing in blood diamonds, no matter how profitable?

H8crilA 7y ago
$XLE for those that want to pick up cheap stocks. Till there's a global solution to the energy problem we'll need oil. Existing solutions are nowhere close to being sufficient, therefore divestment will have no impact on the amount of oil burned. It's ridiculous to think that clicking a sell button on some assets will fix global warming, that's not how the world works. https://en.wikipedia.org/wiki/World_energy_consumption https://en.wikipedia.org/wiki/World_energy_consumption As Bill Gates says, we need to fight two fronts of misinformation: a) that global warming is not a problem, and b) that it is an easy problem.
- maest 7y ago
  > $XLE for those that want to pick up cheap stocks. A nuance is that you don't want to buy into these stocks while people are moving away from vice stocks. However, once the trend is stabilised and there are no more marginal investors to adopt a vice-free portfolio, then you should buy all the vice stocks as they will have a more favourable discount rate.
  - H8crilA 7y ago
    It's already the cheapest segment of the S&P 500: https://www.gurufocus.com/sector_shiller_pe.php https://www.gurufocus.com/sector_shiller_pe.php Timing the exact bottom is hard.
  - scarmig 7y ago
    I remember immediately after Deepwater Horizon, RIG dropped something like 50% to $40 a share or so. I invested heavily in it, proud of my own savviness and cynicism. That worked out well.
    - perl4ever 7y ago
      I found that investing in BP when people were at their most pessimistic about the well being capped did work well. Unfortunately, following up that success by buying into TEPCO once it had dropped by half after their accident turned out not to be a good move. However, one may console oneself that it was a public service in providing some cash to the Japanese pension funds, proverbial widows and orphans and whatnot that were selling at that time.

solarhoma 7y ago

For the past five years O&G E&P companies have been realizing significant loses in a shale driven production world. Where NA producers are quick to turn on the taps and drown the market in oil once $WTI hits $55/bbl. with this comes instability and loss of Wall Street backing. Banks are labeling this as a way to show them in a good light. I.e. ‘fight climate change.’ The actuality is that the want better returns in a more stable environment. I apologize for poor formatting on my phone.

armSixtyFour 7y ago
Exactly this, and if looks good from a social perspective that's just an added bonus.

jobigoud 7y ago

The contrast with the other front page article "Paypal stops payouts to pornhubs models" is interesting. On one hand we don't like it when banks use their power to implement their moral panic regarding otherwise legal activities, on the other it's nice that they use it to avoid financing things we consider bad for the commons.

armSixtyFour 7y ago
My guess is there's more to it than that. I think that they have less confidence in the financial prospects of those projects as well.
bildung 7y ago
One categorial difference is that the Paypal case is discrimination against individuals.
Ogopogostick 7y ago
It's worth remembering that the commons isn't well defined either. Lots of people view the current policy proposals of environmentalism as anti-poor and handouts to the third world. Whether you agree with that framing or not, there is plenty of data that shows mitigation and not outright prevention is an equally valid strategy to climate change. What you're really saying is that it's okay this time because it's an issue you agree with, a more neutral framing would be "...it's nice that they use it to avoid financing things we consider bad."
ATsch 7y ago
Not sure what's supposed to be interesting about that. It is good when good things happen and bad when bad things happen, yes. We don't need to lock ourselves into some kind of universal ethical conclusion here.
- journalctl 7y ago
  They’re also entirely different issues. One is about handling to payment for people who are not really harming anyone (or at least not doing massive environmental damage). The other is... doing massive environmental damage. Cool, so I guess we just downvote stuff we disagree with.