Litigation, polyester and greenhushing: mythbusting green finance

New book skewers solutions for the climate crisis

Climate change is a worldwide, divisive and dynamically evolving subject. Its measurement by environmental, social and governance criteria, in finance at least, is controversial and still in its infancy. Lebanese-British, Singapore-based climate entrepreneur Assaad Razzouk has written 28 short critical essays to expose its clichés, prejudices and misconceptions, ranging from a critique of law firms in ‘Sue the Bastards’ to ‘The ESG Con’, a similar hatchet job on the unmeasurability of the ‘E’ in ESG.

Climate change is an area involving numerous disciplines – science, biology, botany and finance. In ‘Saving the Planet Without the Bullshit’, Razzouk steers clear of the technical side, but covers a range of financial areas, including banking, insurance, bitcoin, green bonds and ‘never buy carbon offsets’. His chosen mode is contrarian.

Curiously, he is a supporter of China, having worked on a coalmining project in Taiyuan and seen it transformed by popular demonstrations from a polluted asphyxiating hell-hole to something approaching a blue-sky city, with all transport replaced by electric vehicles. He is also good on the Chinese electric car industry, which already poses a threat to the European Union and US. Unknown names such as Geely and BYD will become as familiar as Nissan, Toyota and Hyundai.

One of his main themes, and one that is neglected by many climate campaigners, is the ubiquity of polyester clothing and plastics in general. Plastic is a by-product of oil and is sold by the oil majors at prices that undercut traditional materials, such as cotton, wool and silk – themselves not free from environmental criticism. Polyester clothing seems to have no known life (500-plus years?) before degrading. We are hooked on this material by fashion fads generated by cunning PR strategies – another Razzouk theme.

He does, however, detect signs of hope, particularly in the area of litigation. It seems likely that the oil majors will be sued for knowing that climate change was inevitable from their own research as far back as the 1960s. Their early temperature projections are uncannily close to actual outcomes. Law firm DLA Piper has suggested that there will be major litigation within the next two years, with climate activist non-governmental organisations and stakeholders financed by litigation funders – an unholy but effective alliance of varied ethical and monetary motivations. Added to this is the decision of 132 UK barristers and King’s counsellors to refuse briefs to prosecute peaceful climate change protesters or to defend major oil and coal producers.

Too late for this book is the new term ‘greenhushing’, where a company no longer attempts to put its climate action policies in the most favourable light – known as ‘greenwashing’. Instead, it goes silent on its policies for fear of litigation. But this is a dangerous strategy: Legal & General, a major shareholder in ExxonMobil, has asked the latter to reveal at its May 2023 annual general meeting the true cost of the transition to net zero. This is likely to be one of several such cases, where investors fear that a delayed transition could cut the value of their investments by up to a third.

It would have been good to have more on divestment and the ambushing of HSBC’s 2021 AGM by activist shareholders, who got a five-year oil divestment plan. The dismissal of Stuart Kirk, HSBC’s head of responsible investment, for slighting comments about ESG and the bank having to pull ‘green’ adverts because of a UK Advertising Standards Agency judgement, show that public and corporate opinion has radically changed. But whether we still have enough time for solving the climate crisis will be a ‘damn close-run thing’.

John Adams is Director, HR China and HR Financial, Green Recruitment & Training.

Assaad Razzouk, ‘Saving the Planet Without the Bullshit’, Atlantic Books (2023)

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