First it was a day of action on September 13, 2016. Then it was the week of action from February 12 to 17, 2017. Now the day of divestment has come again. This year, environmental groups around the country, led by Native American activists, are participating in what they term solidarity days of action, which they say are aimed at stopping banks from “financing indigenous repression, human rights abuses & desecration of the earth.” While the bulk of the actions occurred at banks in Seattle and Washington, D.C. on Monday, rallies were planned across the United States and Canada.
Since the Dakota Access Pipeline, the original focus of the divestment campaign, has been completed, Monday’s protests highlighted ongoing energy infrastructure projects, including the Enbridge 3 pipeline in Minnesota. On Monday, protesters delivered a letter to the 36 banks providing funding to Enbridge. The letter argued that the pipeline, which would bring Canadian tar sands oil into the U.S., would cause significant environmental harm.
“Major fossil fuel infrastructure projects like this one require outside funding to be completed, giving banks an outsized role to play in shaping our collective climate future,” said Ruth Breech with Rainforest Action Network in a statement. “For too long financial institutions have escaped accountability for the real world consequences of their investments, the time for that impunity has come to an end.”
Last year, divestment pushes forced Wells Fargo branches in Minneapolis to close after protesters locked themselves to the building. This year, more than 100 bank branches in Seattle opted to close to avoid direct conflict. Similar protests targeted Credit Suisse in Switzerland and Barclays in Great Britain, and all told, protest activities occurred in more than 40 countries.
The protest actions are timed to coincide with the annual meeting of the Equator Principles Association in Sao Paulo, Brazil. The Equator Principles is a framework intended to provide a minimum standard for due diligence to support responsible risk decision-making for financial institutions assessing environmental and social risks in potential loan projects. The environmental protesters are attempting to push the group to replace its current principles with commitments that acknowledge that the banks have a responsibility to work to stop climate change and to protect the rights of indigenous peoples.
The Equator Principles have been adopted by 91 institutions in 37 countries, including Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo.
What impact both divestment and these principles might have is unclear. Thus far, indigenous environmental protesters have pushed divestment from mainstream financial institutions. More than $40 million was removed from accounts in banks funding the Dakota Access Pipeline last year. It is not clear if these groups would pledge a return to these institutions if the Equator Principles were changed.
However, this year’s protests do show that divestment alone is impractical on a large scale.
Over the course of the past year, environmental protesters have put significant pressure on cities that have large account holdings with Wells Fargo, Chase, and Bank of America, all of which provided financing to the Dakota Access Pipeline. While they were successful in persuading both Alameda, Santa Monica, San Francisco, Berkeley, New York City, Philadelphia, Seattle, and Los Angeles to vote in favor of divestment, so far, none of these cities have been able to formally close their accounts.
The trouble is that large cities require financial services at a scale far beyond what credit unions or smaller financial institutions can provide. Despite the hype about credit unions, the FDIC would only insure up to $250,000 in investments, far too little to make them a practical option for a city’s cash needs.
Supporters of divestment acknowledge that currently there is no good solution for cities that opt to divest from banks that lend to fossil fuel companies. Instead, the protesters have been pushing for the creation of public banks run by the individual cities and modeled after the Bank of North Dakota, the single public bank in the country. North Dakota has a population roughly the same size as Seattle’s and most of the other cities that have divested are larger still. Many city governments have come to realize that, despite their best intentions, operating a bank of their own is a difficult proposition.
Divestment continues to create a lot of noise, closing branches and bringing hundreds of people out with signs and chants. It still has yet to make a significant impact on any energy infrastructure project. While Energy Transfer Partners acknowledged in court filings that protest activities made finding funding for the Dakota Access Pipeline more difficult, they were able to find the money, and the pipeline was completed in the end.