The ignominy heaped on Fred Goodwin will be nothing compared to that carbon intensive firms risk facing
I must admit I am with those who felt a smidgen of sympathy for recently de-knighted Fred Goodwin.
Not because he didn't deserve to lose his knighthood, he did; nor because the opprobrium heaped upon him is not justified, it is. But because his role as scapegoat nonpareil is so explicitly unfair.
If Goodwin has brought the honours system into disrepute - and remember, bringing the honours system into disrepute is a bit like bringing football into disrepute, it is pretty difficult to tarnish something that has already been dragged through the mud - then there are countless others who deserve to be stripped of their titles alongside him.
If you'll excuse another footballing analogy, who is culpable when, towards the end of an ill-tempered local derby, a player breaks another player's leg? Obviously the player (banker) who has behaved recklessly and inflicted said fracture is ultimately responsible for their actions. But the referee (or regulator) is also culpable for losing control of the game, and it could even be argued the crowd (society as a whole) is responsible for taking such enjoyment in the spectacle, up to the point where someone got hospitalised.
Goodwin undoubtedly played a key role in the financial crash that brought the global economy to its knees, but as extensive investigations into the collapse of RBS have proven he was guilty of spectacular misjudgements, reckless lack of foresight, and staggering greed, rather than any specific illegality. Moreover, he was not acting in a vacuum. As a number of papers have already pointed out there are plenty of other ennobled bankers, regulators and politicians who were complicit in the crash and guilty of similar recklessness. If Fred should be stripped of his honour, so should a fair few others.
All of which brings me - via a rather circuitous route - to how Goodwin's fate contains a stark warning to those businesses that shun the green economy.
For years, Fred Goodwin, as we must now call him, was feted for his work. Operating in a manner that was entirely routine for the industry in which he worked, he was knighted for his to services banking. Yes, some commentators warned that he and his peers were behaving in a reckless fashion, that their actions were not adding to the social weal and may even be damaging it. But these critics were on the margins of mainstream thinking. Conventional wisdom dictated that we needed innovative financial practices, aggressively expansionist financiers, and the wealth they generated.
And then the crash came. And overnight values and judgements changed. Goodwin and his ilk went from being the Masters of the Universe to very naughty boys. Those who had warned that the model pioneered by the financial sector was unsustainable were vindicated, countless others joined them in condemning the bankers they used to praise, and Goodwin and co were strapped to the media ducking stool. Only time will tell if legal action follows public ignominy, as lawyers and investigators on both sides of the Atlantic edge forward with efforts to pin some form of legal retribution on those institutions that caused the crash.
You can probably see where I am going with this. Any business leader at the helm of a carbon intensive firm who cannot hear the alarm bells set off by Goodwin's fall from grace urgently needs a hearing test. The parallels are so precise as to be genuinely shocking.
Currently, fossil fuel based business models are still largely regarded as a routine part of our economy, no more or less unusual that fast-expanding banking powerhouses. Building a successful carbon intensive business is as sure a way to secure praise, honours, and immense financial riches, as building a successful bank. Again, it is possible to ignore the commentators who warn carbon intensive businesses models are reckless, that in the long term they are not in the national interest.
Although, unlike the financial crisis, these warnings are not confined to the margins of society, they are increasingly mainstream and are broadly supported, in theory if not in action, by countless political and business leaders. When the crash comes for carbon intensive businesses - and climate science, the direction of environmental policies, the steady increase in public concern, and most importantly the rapid emergence of viable clean alternatives, dictate that the crash will come - the defence that "no one saw it coming" will prove even hollower than the banker's protestations.
There is growing evidence to suggest the most reckless polluters will face a fate very similar to that of Fred Goodwin. We have seen prequels to this condemnation in the shellacking former BP chief executive Tony Hayward took over his handling of the Gulf oil spill and the periodic bouts of public anger directed at the energy industry over its environmental impacts and more dubious business tactics. Meanwhile, led by the growing band of sustainable investors, warnings over the financial risks carbon intensive firms are storing up through their reliance on fossil fuel assets that cannot be safely burned are becoming ever more vocal. Similarly, campaigns such as the push to have ecocide recognised as an international crime and the efforts by some low-lying island states to determine whether they can sue the polluters they hold responsible for rising sea levels provide an illustration of how carbon intensive firms could one day find themselves in the dock.
It might not be fair, but Goodwin's experience demonstrates that while courts are wary of retrospective justice, the court of public opinion has no such concerns. In extreme circumstances, and environmental catastrophe is nothing if not extreme, politicians can even adopt policies and legislation that at best demand unexpected rapid change from businesses and at worst impose retrospective standards on those parties deemed responsible for the crisis.
As countless respected and influential voices have argued there are now enormous environmental, legislative, reputational and financial risks attached to carbon intensive business models, all of which means those polluters who do not at least make an effort to decarbonise are in danger of sharing Goodwin's fate. Given the number of high profile warnings over the unsustainable nature of carbon intensive business models, the absence of sympathy for reckless polluters stripped of their knighthoods will make Goodwin look popular.
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