Why your bank should shun fossil fuel projects

Banks offer loans for people to build back, although in many informal settlements and rural areas, small-scale financiers come in handy. The banks are kept alive by the same clients affected by these extreme weather, whether small or big. As was evidenced in May, floods affect the high and low.

Banks and insurance companies wield immense power in reducing effects of climate change on communities.

Some fund projects that have significant carbon footprints. Several banks have been called out with regards to the East African Crude Oil Pipeline (EACOP).

The project will transport crude oil in a 1,443km heated oil pipeline from Uganda’s Hoima, to Tanga Port in Tanzania.

How do banks and insurance companies feature here? The Total Energies, with 62 per cent stake in the project, China National Offshore Oil Company (8 per cent), Uganda (15 per cent) and Tanzania (15 per cent) needed loans to raise over $2 billion of the estimated $5 billion needed for the project. 

Banks can lend stakeholders this money. If your bank funds a fossil fuel project that heavily contributes to the global warming, then they are also your enemy.

Author Ngugi wa Thiong’o, in his “Devil on the Cross”, says: “Blessed is he who bites and soothes, because he will never be found out. Blessed is the man who burns down another man’s house and in the morning joins him in grief, for he shall be called merciful….”

There is no difference between banks that fund projects that increase carbon emissions and the Global North which has developed with the help of fossil fuels.

Knowing how Africa is negatively affected by extreme weather, they appear during deadly disasters dangling loans clothed in “aid” wraps.

In the case of EACOP, people have been inhumanely displaced, livelihoods destroyed and people driven to poverty. But stakeholders dangle schools, hospitals and casual jobs, which their governments should give them anyway. According to BankTrack, some 24 banks and insurance companies have either withdrawn their support or vowed not to fund EACOP.

This can be partly attributed to local and global pressure from civil society and communities inhumanely displaced along the pipeline route, 80 per cent of which is in Tanzania.

Globally, several banks have witnessed such pressure, despite insisting they obverse environmental, social and governance principals. Continued investment in fossil fuel companies undermines these goals.

Relying on environmental and constitutional laws, and demanding adherence to commitments under the Paris Agreement and relevant Acts, where applicable, communities that bear the brunt of climate crisis can push local and international lenders to shun projects destructive to ecosystems.

Another means is boycotting such banks and opting for those that fund sustainable projects.

-The writer advocates for climate justice.