Scholtens says that rather than being driven by the industry itself, fresh thinking about sustainable finance is currently imposed by regulators, and by investors such as pension funds. “These funds are owned by their members, perhaps journalists or teachers.” They may not want their money invested in future oil production.
One favoured tactic for the opponents of fossil fuels is to divest shares in offending businesses. Scholtens points out that “you can only do this once.” In any case, shareholdings in big companies are highly dispersed. “You need to be able to sell at least one per cent to be noticed.”
He adds that one much-discussed problem for the industry may have been overstated. Many of the fossil fuel reserves on company balance sheets may turn into unsaleable “stranded assets.” But as he sees it: “This is just the way capitalist societies work. Massive stranded assets have been created by change in the telecommunications industry too. This is the process of ‘creative destruction’; growth comes with pain.”
He says that at least two financial innovations are needed to make finance more sustainable. “One is a tax or price for carbon use: the other is to end the enormous subsidies and advantageous regulatory treatment that go into fossil fuel use today.”
But he adds: “Bankers and business people are human beings too. They have children, partners and neighbours, and they do notice these debates.”