Earth Day: Invest in Our Planet?
This year, the theme for Earth Day is “Invest in Our Planet”, with a focus on the green economy and the role of business and finance in shaping it. The campaign emphasises how companies “who develop strong Environment Social Governance (ESG) standards have better profitability, stronger financials, happier employees, and more resilient stock performance,” citing a study by the Harvard Business Review on the “investor revolution”.
We’ve written before about the dangers of subscribing to a green growth narrative, ways to build a future that doesn’t rely on it, and why we shouldn’t place our hopes in green finance. But given the rise in popularity of sustainable finance and green investment, it’s worth taking a closer look through the lens of care — both of the land and the people who depend on it.
In Budget 2022, it was announced that the increased carbon tax would also come with an option for companies to use “high quality international carbon credits to offset up to 5% of their taxable emissions.” The National Climate Change Secretariat added that this will “catalyse the development of well-functioning and regulated carbon markets.” Though this allowance could help companies overcome some of the physical constraints of renewable energy in Singapore while directing resources to countries that need it, it could also lead to unintentional harm if not done properly. Thus, the criteria used to determine which carbon credits are eligible need to be carefully designed.
One recent example is a secretive “natural capital” agreement said to be worth 80 billion USD, signed between the Malaysian state of Sabah on the island of Borneo, and Hoch Standard, a Singaporean firm. The agreement gave the firm the right to sell carbon credits from 2 million hectares of forest (27 times the size of Singapore) for the next 100 years and keep 30% of the revenue, with the rest going to the state government. However, this was done without consulting the indigenous communities that live in and depend on the forest. Indigenous organisations have written a joint appeal to the UN, arguing that the agreement does not fulfil the UN Declaration on the Rights of Indigenous Peoples and could create a dangerous precedent of privatising collective heritage.
Instead of handing over these forests to investors of dubious credentials and motives, governments should support the indigenous people who have a wealth of knowledge and lived experience in protecting lands on which they have stood for thousands of years. Research has shown that land managed by indigenous communities, which make up a quarter of global land area, have lower rates of deforestation and forest degradation and a slower decline of biodiversity. This is a result of practices and cultures that advocate living in harmony with nature instead of maximising and extracting profits. Indeed, in the Sabah case, villagers living on the forest fringe described how they forage for traditional herbs in the forest and refrain from hunting many animals, while also looking out for lumber poachers.
Sadly, indigenous activists are often violently targeted, making up a third of the 228 land and environmental defenders killed in 2020. In Asia, these included attacks in Indonesia and the Philippines against defenders who were opposing mining, logging, and dam projects. The silencing of indigenous people and their culture and knowledge is exactly how we got into this crisis in the first place, yet their voices continue to be drowned out by the clamour of bankers, consultants and lobbyists.
The carbon markets agreement at last year’s COP26 will greatly increase the demand for carbon credits worldwide. This also means that many more carbon credit schemes are likely to be managed by companies incentivised to extract profits at the cost of local communities, indigenous climate activists argued. Scholar Olúfẹ́mi O. Táíwò points out that asset managers like BlackRock, that control a large proportion of global wealth, have consistently voted against resolutions that support climate targets while greenwashing their actions with “sustainable funds” that provide limited climate benefit.
Closer to home, a study of major Asian banks found them all lacking in plans to tackle climate change, with many continuing to fund coal and gas despite having launched green campaigns. Even if some carbon credit schemes are genuinely effective in reducing emissions, we should question whether the financialisation of nature can truly be regenerative, given that this binds forests and natural lands into a system that is driven by short-term profit, the creation of debt, and expectations of endless growth.
We must remember that the first Earth Day, one of the largest protests in history, started as a ground-up movement that was largely funded by workers’ unions and individuals. Today, we celebrate the power that masses of people can wield by uniting across different communities over a single cause. In addition to fighting for the forests slated for clearance within our borders, we should also extend our support to the wider expanses of indigenous-managed land in our neighbouring countries and around the world. The just transition to a more liveable future has to be shaped by the hands of the people who have spent years working with the land, and not the faceless actors of global finance.