The big Wall Street banks say all the right thing about sustainability and corporate responsibility but investment bankers are, above all, driven by the deal. Turning away business is just not part of their skill set, or mind set.
That’s the best explanation that I can come up with for the fact that Bank of America, Goldman Sachs, Credit Suisse and Deutsche Bank, along with three India-based banks, are managing a share offering for Coal India, a company with an environmental and human rights record that is, at best, spotty.
Their decision to do so is the topic of my story today at Guardian Sustainable Business. Here’s how it begins:
If you’re an investor seeking to profit from the coal industry and you’re indifferent to the issues of climate change, forest destruction and human rights, Bank of America, Goldman Sachs, Credit Suisse and Deutsche Bank have a deal for you.
The four US and European banks, along with Indian investment banksSBI Capital Markets, JM Financial and Kotak Mahindra Capital Co., are managing a share offering in Coal India, one of the world’s biggest coal-mining companies.
They’re doing so despite Coal India’s dismal environmental record, despite the climate impacts of burning coal, despite allegations that the state-owned firm has run roughshod over tribal communities and despite objections by the Sierra Club, Greenpeace and the Rainforest Action Network, as well as by Indian environmentalists.
They’re also doing so despite their own rhetoric about sustainability and corporate responsibility.
I hope you take the time to read the story. It’s tough, I think, but it’s a reflection of the difficulty that the corporate-responsibility and environmental movements have had gaining traction on Wall Street. Most of the big financial institutions have made “green” commitments, and that’s great, but if they continue to finance fossil fuels on a grand scale, they could wind up doing more harm than good.
None of the banks would talk to me on the record for the story, and I imagine that if they did, they would say, correctly, that burning fossil fuels is perfectly legal in India, and everywhere else, as is dumping emissions into the atmosphere at no cost. That’s a political problem, and not a Wall Street problem, they could argue. True enough. But if the banks believe what they say about climate change and the environment, they should then make their voices heard more forcefully in the climate debate in Washington and elsewhere.
Until they do, their rhetoric about sustainability will remain hollow.