The “Big Greenwash Circus”: that was the title of the conference I participated in  last Saturday in Brussels, with different workshops including one on the banking sector. Here is a summary of what I presented there with Frank Vanaerschot from FairFin, with a particular case study on Crédit Agricole, one of three main French banks.

On May 4th, France 2, one of the most famous French TV channels, broadcasted a TV report focused on greenwashing. The banking sector is one of the three sectors targeted in the programme, and more precisely Crédit Agricole. Watched by more than 1 million French people, this thirty minute investigation is a huge blow to the bank’s green reputation as it provides a deeply disturbing insight into the many strategies a bank can deploy to greenwash its activities. This way please…

THE STARTING POINT: SEAN CONNERY

The starting point of the TV report is the unforgettable ad for Crédit Agricole, with Scottish film star Sean Connery, claiming that “It’s time for green banking” against the backdrop of earth moving from a black fossil hell to a green renewables paradise. Really worth watching here, it is less than one minute long.

As advertisers themselves state in the programme, you couldn’t find a more shocking way of presenting things for a greenwash ad. It almost looks as if it was made on purpose for a satirical show, as a memory of propaganda movies from the 50s. Unfortunately, that is not the case and  journalists find out that this ad campaign costed 5.7 million euros to Crédit Agricole, including 4.2 million for Sean Connery alone. This amounts to a staggering fee of 79 245 euros per letter for him to pronounce the  sentence “It’s time for green banking”, without the breathings that is… It was a substantial investment but Crédit Agricole did win a contest with this ad: the Pinocchio prize, granted in 2010 by Friends of the Earth France, in the greenwashing category precisely!

If this is clearly the caricature of the caricatures, as even Stanislas Potier, the new head of sustainability at Crédit Agricole, recognises in the TV report, you don’t need to look hard to find amazing claims from other banks around the world, all pretending to save the planet: just check out those quotes on page 17 of our latest report “Bankrolling Climate Change” to understand that the sky is not even the limit for them.

THE HARSH REALITY: DODGY DEALS

Behind this beautiful picture we then discover the hidden part of Crédit Agricole’s activities, the ones that are not mentioned in its annual CSR report; its involvement in a series of dodgy deals around the world. Crédit Agricole forgot to mention its involvement in the coal fired power plants Medupi and Kusile in South Africa, as well as its involvement in the tar sands industry in Canada, or in offshore arctic drilling. This is also confirmed at the sector level as Crédit Agricole is one of the top 20 climate killer banks that has invested the most in the coal sector since 2005. Not so “green banking”, eh!

This comparison clearly shows the fundamental contradiction between how banks want to appear in public, their fantasy world for the entertainment of their reputation and the confidence of both their own staff and their customers, and the harsh reality of where they actually invest their money: not where their mouth is. This kind of psychological denial is also called “cognitive dissonance”. “Come on, we can’t be that bad!” so they think. Some of this dissonance is subconscious, but some of it is pure cynicism.

This is well illustrated by the words of Crédit Agricole’s head of sustainability himself, trapped by his mic that was still on after the interview, when we hear him say that arctic drilling, which he  understands well, is “very problematic, that Crédit Agricole shouldn’t be in this!”… right after defending the access to oil for Greenland in front of the camera. A double speech which makes us go crazy!

This is again illustrative of a permanent characteristic: companies, banks in this matter, seem to be fundamentally incapable to officially acknowledge their wrongdoings. This is also what makes many of their annual CSR reports such a mockery.

THE LITTLE NICE GREEN PROJECTS

This incapacity to tell the truth on dodgy deals is also illustrated by the immense desire of banks to show the “good projects” they finance. That was actually the initial purpose of the journalists coming to visit Crédit Agricole in the beautiful region of Brittanny, where Stanislas Potier is very proud to present a local biogas project.

As the reporter from France 2 rightfully emphasises, if this kind of project can indeed be “good”, the only problem is the scale of things. Comparing the induced emissions of the Medupi coal fired power plant in South Africa, financed by Crédit Agricole, and the ones off-set with this biogas project in Brittanny, they calculate that Crédit Agricole would need to finance 113.207 of such projects to compensate for the 30 million TCO2 emissions of Medupi alone! But they only have 25 planned in France up to now…

If it is true that banks finance more and more renewables, these kind of projects are also useful smoke screens to hide both the destructive impacts of the dodgy deals mentioned above and the fact that their financing of fossil fuels is also on the rise.

THE FORGOTTEN TOPIC: FINANCED EMISSIONS

Part of this hidden side of banks activities is the tool also mentioned in the programme on a topic banks have been historically reluctant to even pronounce: their financed emissions. Even in 2012 many international banks still present in their annual reports their “direct” GHG emissions, the climate impact resulting from heating, or cooling their offices, staff travel etc. However, over the years many studies have clearly shown that the key issue is not their direct impacts but the emissions resulting from the business activities they finance; their indirect emissions.

This is why in 2010 Friends of the Earth France and the consulting group Utopies published a tool to calculate the financed emissions of a bank as well as individual savings products. Which brings us to a disturbing fact that you never hear on TV (except for this time): having 5 000 euros  in your bank account at Crédit Agricole for a year is the equivalent of driving a SUV!

After denying any co-responsibility for years for these financed emissions, banks are now fighting on the methodology of the calculation itself while in the meantime their financed emissions continue to grow as much as their climate talk: nothing but hot air!

THE MISLEADING PARTNERSHIP

Back to the programme. After the visit to Brittany Elise Lucet, one of the most famous French journalists, brings us to the WWF France offices to meet with their director on their partnership with Crédit Agricole. The result is pretty outrageous, with WWF France head simply incapable to justify such a partnership in relation to their stated mission. Every year, WWF receives 400 000 euros from Crédit Agricole and ‘they have good discussions with them’, but we do not get to know more on the substance and results of these on-going discussions as nothing is ever written down! In return, Crédit Agricole can depict the beautiful panda in their annual reports and in its corporate communication. Guess what the public will remember…

THE FAKE ETHICAL SAVINGS PRODUCTS

The TV report ends with an investigation of the fairy tale-like “socially responsible investment” world. The French label “Novethic” that SRI saving products can receive is depicted as one the signs that the public would trust to buy “ethically”. Unfortunately, again, the report features a deeply disturbing interview with the SRI head of Amundi, the asset management subsidiary of Crédit Agricole, confronted with the fact that one of his SRI funds contains 13 oil companies, 7 car manufacturers and one weapons producer. His immediate reaction is to explain that they chose not to exclude any sector from their product. that oil is part of the economy, but that they want to avoid the “oil spill syndrom”. What a failure! The fund indeed also contains TransOcean, one of the companies involved in the Deepwater Horizon oil spill in the Gulf of Mexico! The SRI head of Amundi is stunned when he hears this.

This is unfortunately just another illustration of what you can find in those SRI funds, some of which contained both BP and TEPCO before the Deepwater Horizon oil spill and the Fukushima catastrophes: pure greenwash for the public!

If the report and this article focus on Crédit Agricole, most international banks use the same techniques in the same ways. There are other greenwashing strategies that banks can use, but this is already a pretty good exemplary tour! A great recipe for reporters around the world who want to debunk standardized corporate communication and bring shocking news to their public. That’s what is called “reputational risk” for the banks…