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Because they don't have bad credit. This is more similar to how some banks reuse service to pornstars. If banks are making decisions for non financial reasons t
by eloff 6y ago
Because they don't have bad credit. This is more similar to how some banks reuse service to pornstars. If banks are making decisions for non financial reasons that seems problematic to me.
If they really see it as a risky investment, that's fine.
- burkaman 6y agoI can only find news articles about this, not a release from IIGCC itself, but financial risk is clearly at least part of their rationale: > Bruce Duguid, head of stewardship at Federated Hermes’ EOS division, said there was a need for “dramatic shifts” in bank financing in order to meet the Paris goals and “avoid the looming systemic risk of a ‘carbon crunch’ hitting their balance sheets”. It seems pretty straightforward that investing in something that violates a global UN agreement is not a financially sound decision.
- ForHackernews 6y agoWhat about refusing service to marijuana businesses? There's both a real and perceived regulatory and reputational risk in giving money to these types of companies.
- elliekelly 6y agoThat’s a bit different because, for now at least, a bank knowingly doing business with a marijuana company violates BSA and AML regulations. The adult entertainment industry is also frequently refused banking services by citing the same laws and regulations but those aren’t flat-out prohibited where marijuana is because it’s a criminal enterprise in the eyes of the federal government. Funds coming from adult entertainment are (1) high risk (in theory) for being proceeds from a crime (prostitution) and (2) high risk for money laundering because those businesses are often high cash or cash-only. You can see how designating a business as #1 necessarily creates the situation that gives rise to #2 and so it becomes a self-fulfilling prophecy: the business is high risk because it’s high risk.
- triceratops 6y ago> If they really see it as a risky investment, that's fine. Climate change threatens to devastate hundreds of millions of lives. It will disrupt the global economy for decades. So, yes, fossil fuels are a risky investment.
- eloff 6y agoWe're not talking about that kind of risk to humanity here. We're talking specifically financial risk to the bank.
- burkaman 6y agoThe financial well-being of banks is inextricably tied to the financial well-being of their human customers and employees. Until they can find a new species to take over, "risk to humanity" is relevant.
- eloff 6y agoNot to the bank. The bank's actions won't make one iota of difference either way to climate change. All the banks acting together could - but each individual bank, much like each individual person can do nothing that will matter. It's a tragedy of the commons. So it's not an actual risk to the bank acting alone in its own interest - despite the fact that the risk to humanity as a whole is very real.
- burkaman 6y agoI disagree, climate change is not an on/off switch. There is a spectrum of possibilities, and marginal changes can have marginal effects. Of course group action is more meaningful, and that's why this group of investors is pressuring a group of banks.
- eloff 6y ago> There is a spectrum of possibilities, and marginal changes can have marginal effects. That marginal effect is exactly that, marginal. It makes as much difference as adding a single drop of water to the ocean. If you're doing a risk calculation, which is what we're talking about - not a moral calculation - then adding zero to any term in the calculation doesn't change the result. I know where you're coming from, your heart is in the right place, but your mathematically wrong here. > Of course group action is more meaningful, and that's why this group of investors is pressuring a group of banks. That's the only way it can work. I wish them luck.