Our Demands

It is time to cut off the financial support for fossil fuels. For the sake of humanity, nature, climate, and financial stability, financial regulators and central bankers must supervise the financial sector’s transition away from the destructive and risky fossil fuel industry. This will require decisive action from international standard setters.

Cutting financial support for fossil fuels immediately is a responsibility to past, present and future generations. More concretely, we demand the following financial reforms, which represent first, feasible steps towards dissuading banks from investing in fossil fuels:

Apply the “one-for-one” prudential rule for any financing of fossil industry. That is, a regulation that requires banks and insurance companies to back 100% of any financing they provide to fossil fuel companies and projects with their own resources (capital), given the unacceptable risk involved (including deforestation or ecosystem degradation). Also apply a dedicated ‘risk buffer’ to account for the systemic dimension of climate change, which will affect companies and financial institutions across economies and geographies.

Review of the large exposure threshold and credit risk weights for exposures subject to high transition risks beyond the fossil fuel sector

Consider biodiversity and other severe environmental risks in the existing rulebooks for financial institutions.

Another possibility would apply an existing mechanism, the Targeted Longer Term Refinancing Operations (TLTRO) used during the COVID period, to establish a differentiated credit-rate system, a sort of bonus-malus that would make loans for ecocidal companies much more expensive, and the financing of the energy transition and local cooperative economies very cheap.

The Financial Stability Board (FSB) of the central banks should consider climate change, environmental degradation and biodiversity loss from the broader financial stability perspective beyond banking and insurance sectors. The double materiality principle should be at the heart of such considerations: on the one hand, financial institutions face financial risks due to their dependency on climate and nature; on the other hand, they facilitate climate- and nature-destructive activities, which increase the risks for the planet and institutions themselves. The international standard-setters – the Basel Committee on Banking Supervision (BCBS) and the International Association of Insurance Supervisors (IAIS) – should review their rulebooks and implement the necessary steps, as outlined above.

The FSB, BCBS and IAIS must be made to confirm an accelerated timeline on the expected outcomes and announce roadmaps for this new agenda.

We demand the critical recognition of indigenous and traditional communities’ fundamental rights, as well as respect for their ways of life, and their systems of knowledge. Amongst others, financial institutions must respect their right to Free, Prior and Informed consent (FPIC) and binding prior consultation in relation to projects that might affect their territories or ways of living. Particular attention shall also be given to the Right to Say No, which reinforces the central right of communities at large, no matter whether indigenous or not, to reject proposals if the results of negotiations are unsatisfactory. This crucial concept amplifies community voices, and requires companies to value indigenous wisdom and customary law. We thus conceive the Right to Say No as a tool in favour of self-determination and self-governance, enabling communities to shape their own growth model through grassroots methods and local legislation.

We must impose that human and environmental rights prevail over corporate profits. Companies and financial institutions must be nationally and internationally regulated under human rights and environmental law, and be held legally accountable for any violation of health, life, water and people’s autodetermination – fundamental human rights that are systematically threatened by extractive industries. This means that no financial backing should be allowed to support activities that lead to deforestation and the destruction of critical ecosystems such as seas, wetlands, rainforests and the cryosphere. Projects cannot and shall not destroy or break the natural regeneration cycles of ecosystems, thereby destroying their resilience and life-giving capacity.

The global south “owes” trillions of dollars in debt and, at the same time, owns trillions of dollars in fossil fuels that it is forced to extract to pay. This debt has been contracted through abusive, neocolonial terms of trade, by the dictatorship and corruption of the transnationals, imposed by the neocolonial agenda of the International Monetary Fund, the World Bank and the G7. It is therefore illegitimate and must be cancelled. Because it prevents countries from developing public policies that benefit their peoples: to cancel the debt of the global south is to guarantee them political and economic space to develop policies for the protection of different ways of life centered on the reproduction of life, communities and ecosystems. Cancelling this debt means creating the possibility of a just and self-determined energy transition, recovering the capacity to invest instead of having the impact of investments coming from elsewhere imposed on them.

We demand that all major financial institutions decolonise global finance. Their function must be fundamentally transformed to address the needs of both the global south and generations to come. Current debt traps associated with development and disaster relief, unfair credit rating systems, global north control over the International Monetary Fund’s (IMF) voting and reserve asset allocation, structural adjustment and austerity measures, among other policies, all sustain colonial practices. It is essential to promote equitable representation of the nations of the global south and their central banks in financial decision-making spaces and in global standard-setting.