(00:01):
Well, I'm in over my head. No one told me trying to keep my footprint small was harder than I thought it could be. I'm in over my head. What do I really need? Trying to save the planet? Oh, someone please save me. Trying to save the planet is someone please save me.

(00:25):
Welcome to you over my head. I'm Michael Bartz. My guest today is Michael Kind. Michael is a senior campaigns manager at the campaigning group ShareAction. ShareAction campaigns for a financial system that works for people and the planet. Michael leads their work with individual people. Whether they be pension, savers, retail, investors, or concerned citizens, he has worked on campaigns, mobilizing the power of individual people through the financial system to bring about changes at some of the biggest UK companies, including Barclays, HSBC, Tesco, and Unilever. Welcome to in over my head, Michael.

(00:58):
Hi. Yeah, thanks for having me. I'm excited to be here.

(01:01):
So when talking about the, just transition, we covered poverty and inequality, and this got me thinking about money and how we use it to address the climate crisis for those who have money, things like investments, dive investments, and pensions come to mind. I'm curious how big of an impact these have on making our world a better place after all money talks. So I think we should talk about it. Perhaps we can start with a very general overview of our current financial system. So let's say I've got money in one of the big banks, some of it's in savings or investments. I know they don't have a little box saying Michael's money. Don't touch it's part of a bigger system, but where is that money likely going?

(01:36):
Yeah, that's a great question, I think. But just to begin with just on your kind of first point, if that's all right, just about why money, I think it's just, it's really worth reflecting on that because when we think about the climate crisis, we often think of companies as the primary culprits there's that stat, which says like a hundred companies, we're responsible for 71% of emissions, right? So it's worth focusing on companies, but kind of as campaigners, it's really important to think about where those companies get their power and influence from. And we often think about consumers. We often think about policymakers, but actually, a really big source of their power is from the investment community, right? The investors that are giving them the money that are enabling them to do a lot of the things that they're doing that is damaging the planet.

(02:16):
So, yeah, excited to dive into that. And in terms of the structure of the system, it's is really complex. It varies from region to region, but I can, I can try and break it down a little bit to give a sort of generalized, standardized view of what things look like as an individual citizen. There's lots of different financial institutions that you'll engage with, who you kind of hand money over to the most kind of obvious ones are a bank you'll put money in a bank account. You might be saving for a pension. So you'll be handing money over to a pension provider. And you might, you know, paying for insurance and handing over money to an insurance company. Or you might just have like an individual kind of saving account as well. But when you're doing that, you're basically handing over money that you've made to a financial institution who are there to look after it for you, but they're not kind of just sitting on that money and waiting for you to claim it when you want it in all of those cases.

(03:03):
And usually what happens with any financial institution is that they'll take this money and they'll invest it to try and make your return, but also to make them a little bit of a return. And when we say invest it, that really means investing that money in a company. There's some investment in currency in real estate and that kind of thing, but on the whole, your money's being invested in companies. And those are the biggest companies in the world. And some of the companies likely that are responsible or have a large degree of responsibility for the climate crisis. There's this kind of flow that starts with you and your money through different financial institutions that kind of gets turned into real-world impact. When it's invested in companies who ultimately know the kind of fabric of the world that we interact with, it's worth knowing as well, that there's like a couple of kinds of quite important financial intermediaries that your money will flow through.

(03:48):
So this doesn't happen so much with banks, but if you're putting money into a pension account or an insurance account, so they don't actually often handle that much. The investing they'll hand the money over to a type of organization called an asset manager who basically collects loads and modes of different pots of money and invest that and make decisions about it. And they're some of the most powerful financial institutions in the world, even though they're not particularly kind of public-facing biggest one who you might have heard of is called BlackRock, who manage, I think like 6 trillion worth of like assets, which is just an incomprehensible amount of money. But basically, these are like financial institutions that collect money from pension funds that have collected money from you and invested in companies and the decisions they make about kind of where to put that money and what to do with it when it's invested somewhere and have a huge impact.

(04:31):
That's really interesting. So how do I know, let's say with banks, which companies they're investing in with my money?

(04:39):
Yeah, it's, it is often the first question people ask us is like, where is my money going? And sadly, it's not always an easy answer to find that out banks and, and pension schemes, for example, they'll often give you like the top 10 companies that you're invested in, but they often won't give you a full list. I mean, the first thing you can do is ask, they're not necessarily gonna tell you, but there are kind of statements and policies that these financial actors put out into the kind of public realm to outline kind of their investment principles, I guess. So yeah, if you look up your bank's kind of investment policy on climate, it should give you an indication as to where it's going, even if it's not the sort of specific companies, and then there's different NGOs and kind of consumer organizations out there that break a lot of the data down and kind of rank banks and financial institutions on how they invest their money, which kind of give a good impression as well at ShareAction.

(05:29):
We recently put out a ranking or a bit of analysis, I guess, outlining which of the biggest European banks were investing in fossil fuel companies to what extent. So there's lots of that kind of stuff out there that you can look at. But I guess the reason is difficult, I guess, is that a lot of these investors view where they invest their money is their intellectual property almost right. Is their kind of idea as an investor of like how to go and make money. So they don't necessarily have an interest in making that public cause they don't want another bank to just copy that. Cuz they pay people a lot of money to select the right investments. Right. So it's tricky. Right? Cuz it's, I mean, as we explore, it's both understanding which companies they're investing your money in and it's also once they're invested in those companies, what do they do? Cuz you get a lot of power once you're invested in a company. So it's quite a murky picture and want to, to unpick

(06:18):
Clearly very complicated. Yeah. I guess maybe can we speak generally about what sort of financial institutions are divesting from fossil fuels? If you wanna talk about that?

(06:28):
Yeah. So the fossil fuel divestment movement really kicked off about seven or eight years ago now. And initially was really, really kind of taking off in universities where there were lots of kind of committed students who are lobbying their, their universities and colleges to divest from fossil fuels. So that's kind of been a very big space for that for a long time. And it's predominantly where most of the divestment has happened. I guess, other organizations that are doing that are ones that are explicitly mission-driven. So charitable investors, for example, who are campaigning on the climate that often have taken their money out of climate harmful industries, a lot of the kind of mainstream financial institutions haven't divested from fossil fuels and they're quite reluctant to do so and hesitant to do so. And that's a really fascinating debate that we can get into cuz there's lots of interesting content on, on both sides of that discussion.

(07:19):
Could, a financial institution be investing in a fossil fuel company and still be good for the planet or saving the planet.

(07:26):
Yeah, it's a really fascinating debate. And I think when you think about the power investors have to try and effect change, there's kind of a lot of layers to it and kind of the instinctive reaction and definitely, the kind of initial reaction you generally have is that what investors should be doing is taking their money out of harmful companies like fossil fuel companies. There's a kind of very inherent logic to that, right? That makes a lot of immediate sense. And it's a kind of totally understandable kind of way to think about that. And it used to be why I was at, so I got into this through being at a university that had a divestment campaign and really felt that the only way for the university to take any action was to take its money out. But I kind of gradually realized that there are lots of complicated power dynamics at play here.

(08:09):
And it's a little bit more complicated than it is on the surface because ultimately when you invest in companies, what you're usually doing as a big investor is buying shares in those companies. So you're buying like a, a slice of the company pie, right? You're getting a seat at the table and those shares come with a lot of power, quite explicit, legally backed and enforceable power to affect change within companies. So if you own 10% of the shares in a company, ultimately you own 10% of that company and you have 10% of the voting power. And with that power, you can go to the company AGM like an annual general meeting where decisions are made. You can file votes called shareholder resolutions with other shareholders that if they pass can literally drive company strategy and force companies to take certain courses of action, like in some countries like the UK.

(08:53):
And I believe in Canada as they're legally enforceable in some like the US, they're not legally enforceable, but they, there's still huge power there. And you can just vote on all these resolutions that happen, which include, who should be on the company board, for example. And that's a load of power. And the argument you usually hear from the biggest investors is that they are using those shares to try and affect changes within companies. And if they were to just divest them and sell them someone less responsible might get those shares and not use that power to affect change within the company, which is a really interesting one to explore. Now you might think that selling all those shares might do a lot of damage to the company's financials and hurt their share price and hurt their ability to borrow money. That hasn't really happened despite there being quite a lot of divestment.

(09:35):
But I guess the case really for divestment has always been that it's not necessarily about harming the company financially. It's about challenging their kind of social license to operate by kind of creating kind of a stigma around them. And I think that's why you've had universities, charitable institutions, big newspapers, like in the UK, the guardian have divested cause for them they have less money to invest. So they have less power at the table, but their social capital is really high. So divesting is really powerful. But if you are like, I don't know, a BlackRock who has 10% of the shares in like a company that's harming the climate, you can do an awful lot to effect change within that company from the inside. So it really depends on who you are. I just say it's super important to recognize that a lot of the biggest investors are not using their power to engage with companies in the way that they could be like most investors, the biggest investors are not going to AGMs. They're not filing these votes. They're not really pressuring companies to affect change. So that's part of the reason I think as well, that lots of people are very Prodi is because there's just been an absence of kind of far-reaching effective kind of engagement to try and change what companies do.

(10:41):
No, yeah. That's I actually hadn't thought about that before. So that's really interesting that you could affect change from the inside. I could see why divesting would make sense because perhaps you can't influence those major investors. Like I, cuz maybe you don't know who they are or yeah. You, maybe you can't just influence them personally. So you have to influence them socially. Would that be the case?

(11:00):
Yeah, I think so. I think, it really depends on who you are, right? But the university I was campaigning at had a relatively, very small investment portfolio. It wasn't gonna be able to drive that much change within fossil fuel companies, but the kind of social capital of them publicly and saying they weren't gonna be invest in fossil fuel companies I think was very powerful. And I think it's, it is important not to think of these as binary strategies. They're part of the same toolkit. I think on the whole, you should try and engage with a company to try and change what it does first. But if it keeps failing, then ultimately divestment is your last option. It's a very fraught debate and people have very different views on it. And I've kind of changed the way I think about it a lot as well. And ultimately I think it comes down to wherever you think that the biggest investors are gonna use their power, ultimately to try it within companies to try and effect that change person. Definitely there's a lot of behavioral change that needs to happen within those types of institutions before that happens. But the potential power of these huge asset managers and investors using their shares to fundamentally change the strategy of fossil fuel companies and other kind of climate impacting companies is huge. So we should consider it at least.

(12:08):
Oh for sure. And you touched on briefly that depending on the country, some of these things are legally enforceable. So I'm wondering like, is there a larger picture at play where we have to have governments come in and enforce some of these changes if maybe the investors aren't going to do that?

(12:24):
Yeah. So I mean, in, in the UK, for example, where share action predominantly work, we have quite a good legal mechanism where the kind of shareholder resolutions that investors file are legally backed by the law. So that's really, really helpful and it's relatively, it's not easy, but it's relatively doable to file shareholder resolutions in other countries. And in the US, for example, where a lot of the biggest investors are, it's really tricky resolutions, aren't legally enforceable, they're kind of advisory to the company. So the company doesn't have to act on it. And the kind of regulator, the sec has huge power over, like which votes make it onto the ballot, whereas in the UK. And I think in calendar as well, if you file a vote, it will get on the ballot. So yeah, in the us, for example, governments definitely need to step up and providing a kind of regulatory framework that gives investors the actual power to hold companies to account because that's definitely lacking, but in, in countries like Canada in the UK, where it's a easier to get these resolutions on the vote and where they're kind of legally binding, it's very straightforward in lots of ways actually for, for the biggest investors to use their power, to, to drive change at the heart of companies.

(13:32):
Yeah. It seems to me like, like, we'll say those biggest investors are gonna be maybe a handful of people on the individual level. Would divestment be a better option if you don't have a lot of money in various companies relying on that social change, would that be the most effective thing?

(13:47):
Yeah. I mean, I think that's an individual citizen. It, depends how much money you have to invest. Right? If you've just got like a little bit of money, you are like putting into investment bots and you want to align your values with your money. Divesting is a really good way to do that. But having said that, you know, having even one share allows you to get to an AGM and gives you the opportunity to turn up and be in a room with the decision-makers, with the CEO and the chief financial officer and the chairperson of a company. So that's also like incredible power to have as an individual citizen with one share, which can cost you maybe like $20 or pounds to get in the room with those decision-makers is a level of access that you are really, really, very unlikely to get in any other way.

(14:27):
So it depends which way you look at it, to be honest, whether you value having your money completely aligned with your morals in terms of not having any money in fossil fuel companies or whether as an individual, you think, oh, actually it'd be great to go and be in the room with those decision-makers and tell them what I think should happen. It's something we do at share action. We, every year we go to about a hundred plus AGMs of the biggest companies in the UK just by owning one share in those companies. And that's in a whole range of companies and we ask them questions on a whole range of issues, but we've seen like massive successes through our campaigns, just by being at the AGM and being present there every year. It really puts something on the agenda. You meet all the decision-makers, and you get their contact details. You can have a follow-up meeting with them and if you're there again next year, you can keep pushing them. And whatever they say to you in response is great ammunition for your campaign. So if you're a campaigner and you're targeting a company, being a shareholder is a great way to have an in.

(15:19):
So, I know a, a big part of the work that ShareAction does revolves around pensions, how influential are pensions when it comes to addressing climate change?

(15:27):
Pensions are really important. And I think when you look at the kind of financial system as a whole and the actors within pension funds are one of the most important actors, the amount of money in pension funds exceeds the amount of money in other kind of financial degrees in the UK, at least nearly 50% of all the money that gets invested comes from our pension funds. So there is like huge amounts of money in our pensions that are really being used to fund all sorts of things. And I think they're really important because most people if they're working, I, I don't actually know what the kind of pension system is like in Canada, but in the UK, if you're working, you have to be enrolled into a pension scheme. So most people have a connection to the financial system through their pension and pension funds can be quite directive in sort of just saying how they want to invest their money.

(16:14):
So I think as I mentioned at the start, there are these different sorts of financial intermediaries that you go through and you'll give your money to a pension fund and your pension fund will then hire an asset manager to do a lot of the kind of investing. So pension fund isn't necessarily making decisions about which companies to go into, but when it hires an asset manager, it can say to the asset manager, look, this is the amount of return I want on this amount of money for the people we're investing the money on behalf of these are the broad values that we want to see implemented in terms of like how you invest it and how you engage with companies. So pension, fund's kind of a really powerful role in driving change within the asset management industry, by sort of saying like, this is the minimum standard for what we want to see happening, because there's this interesting relationship between them where the pension fund is quite limited by what the asset manager is willing to do, cuz the asset manager is ultimately investing, but the pension fund can actually demand quite a lot from the asset manager.

(17:05):
So in that kind of chain, I guess from you, your pension fund, your asset manager to the company, you invest in the pension fund, a very, very important role. So we should totally pay attention to our pensions. And the good thing about pensions compare to say, I guess like, like insurance and campaign against insurance companies is that collectively as citizens, we kind of share pension funds through our workplaces, for example. So it's very easy relatively to kind of build momentum behind a campaign in a workplace or local area targeting like a government pension with people from that community to put pressure on a pension fund. Whereas now with an insurance company, it's harder because you, people who are using an insurance company has spread all over the place and there's no kind of common ground. So they're both a really important institutions to target and a quite good ones to my overlay around because lots of the same types of people will have a stake in them

(17:55):
Here in Canada, we have the Canada pension plan. So that would be national. So you're getting people from across the country with different values. And I wonder cuz you maybe won't convince someone if you wanted to say divest from fossil fuels maybe is there like a, an economic case to invest in more green or more ethical companies in pensions?

(18:14):
Yeah, definitely. I think initially when a lot of this kind of responsible investment stuff came on the scene, I think there was lots of cynicism about the kind of financial merit of it. But actually, I think if you look at the data over the past sort of five years or so when there have been kind of comparable green and or ethical and like traditional funds, the kind of ethical funds have done just as well over the past six months or so with the war in Ukraine and the gas crisis is true. Fossil fuel company shares have shot through the roof in a lot of green investments have done quite badly, but if you take a longer-term picture, they do very well and you have to take a longer term view with investments cause ultimately, especially with a pension, right, you're, you're saving for something you're gonna use in 40, 50 years time.

(18:54):
So you have to look at the long-term picture. And when you think about it in those terms as well in 50 years' time companies that are harming the climate are gonna either have to fundamentally reshape their business or they won't exist anymore. So being in the companies that are kind of prepared for the future should really do you quite well in the long term. So yeah, there's, there's definitely a case and research on this definitely shows that there isn't necessarily an inherent, there's not inherently better to invest in like ethical things or non-ethical things there's no real difference. I think the biggest difference it makes in your investment portfolio is having a good fund manager. So the person, who actually does the investing, like having a good read of what's going on is not investing ethically is gonna harm you necessarily.

(19:34):
Yeah. And I think just on the individual level, as you said before, it's complicated. So I think it would be may be difficult to make an informed choice. Like I'm imagining, let's say with the pension funds, can individuals influence what pensions are investing in, let's say at the national level?

(19:50):
It's tricky at the national level, in that a lot of the kind of decision-making around pensions is done kind of within the schemes themselves. It depends on the context that you're in, but there are occasionally sort of pieces of legislation around pensions and how they should be invested that people can get involved with. So for example, in the UK, there was a, pension schemes bill recently and we lobbied for it to kind of mandate for pensions to be aligned with the goals of the Paris agreement. It didn't pass sadly, but that's an example of a campaign where you can kind of get involved with a broader kind of policy reform. And I think ultimately that's really important and you can do a lot on an individual level. Usually, you can choose between a set of funds that you can move between that might align your money with your values.

(20:29):
But I think it's really worth understanding that there's a kind of broader mindset and cultural shift that needs to happen within the world of investing ultimately like growth profit maximization is the norm, which guides a lot of behaviour in the system. And that includes responsible investing or often been characterized and understood as a way to minimize risk and maximize long-term profit. But actually like I think we know if you look at some of the recent academic work endless growth, isn't good for the environment, it's not good for equality. And actually, there's a kind of quite an explicit kind of boundaries that we need in our economy to sort of stay within. And there's some really fascinating work that Kate has done on owner economics. So having like a minimum standard living and a kind of top-level, these are the kind of planetary limits that we have.

(21:15):
And actually, I think we really reshape the kind of fundamental norms guiding what's done with pensions and investments generally away from growth to providing an economy and providing for a society that exists within that kind of boundaries. You know, that's bigger than individual pension schemes. That's bigger than like national kind of policy making. That's just, a cultural kind of global man set shift when it comes to kind of norms that we need to get involved with. And that's a really tricky conversation to have and one that's starting to happen. But I think that's kind of what I'd point to at the kind of overarching level.

(21:45):
So on the ShareAction website, it talks about co-filing a resolution. What is this?

(21:51):
Cp-filing a resolution is one of the most exciting ways I think that you as an individual citizen can get involved with campaigns to change what's happening in the investment systems. So basically co-filing a resolution means getting involved in a campaign to put one of these votes on the agenda, a huge company, whether you're a huge investor, like an asset manager or like an individual citizen who has one or two shares, you're basically trying to reach the kind of minimum threshold required within the law to get one of these votes on the table. That can be as little as 5% of the shares or it could be, you know, having a hundred shareholders. And these are really brilliant campaigns to get involved with for a number of reasons. First of all, it puts huge pressure on a company cause it's quite rare that a shareholder resolution gets filed.

(22:32):
So it gets loads of media attention kind of outs. The company is like, a company that's having a negative impact on a certain issue and it'll bring a company to the negotiating table cause they really don't want to see these votes going to the AGM cause it'll get huge pressure and media attention. It also forces every single investor versus shares in that company to make a decision about what they think the company is doing on that issue. Maybe we can bring this to life by talking about a real-world example. So one of the companies that we've been targeting at share action is HSBC who are a large UK bank. And they're one of Europe's biggest funders of fossil fuel companies. So what we did is we worked with a hundred shareholders about 80 to 85 individual citizens who bought a share to get involved about 15 big investors, pension funds, asset managers, et cetera, to put this vote on the agenda, basically asking HSBC to stop their financing of fossil fuels on a timeline, consistent with the goals, the Paris agreement, quite a big ask for a company that was one of the biggest funders of fossil fuels.

(23:26):
Initially, they were quite reluctant to negotiate with us, but we got loads of media retention all over the financial press. We got HSBC in the room, started negotiating with them and got to a point where HSBC public could be committed to cease their funding of coal globally, which was a huge win. Obviously, coal is one of the dirtiest fossil fuels and there's one. They have been funding for years. So it's a great way to kind of get them to make serious concessions around their kind of fossil fuel financing. When you file a shareholder resolution at a company in a particular sector, you are kind of quite publicly saying what the standard is for that sector and what the minimum is. And their competitors are unlikely to want to have you come after them and for them to have the same kind of media pressure. So I think it can often cause kind of broader ripples in certain sectors.

(24:14):
I'm kind of circling back, but you briefly touched on insurance companies, are they different than the other things we've been talking about?

(24:21):
Broadly insurance companies work the same way as pension funds in that you hand them over money, they invest it so that if you have to make an insurance claim, they've got enough to pay out and have some leftover themselves. The other kind of interesting thing that insurance companies do as part of the financial system is that obviously, they underwrite companies' loans. They just underwrite companies' risk generally. So insurers kind of have another function in that fossil fuel companies, if they wanna go and like build a new coal plant will have to get insurance on that. If insurance companies stop doing that, stop saying stop working with fossil fuel companies, fossil fuel companies themselves. Can't really go about doing that without endurance cuz I mean that that's very, very risky.

(25:04):
Could people influence that with their insurance companies?

(25:08):
There's less kind of organized campaigning around insurance companies than there is risk around pensions and banks. I guess what you have with insurance, which you don't often have with pension funds is that you as an individual often choose who your insurance provider is, most people's pensions are chosen for them by their employer. So you don't have the kind of consumer power of taking your money elsewhere. Whereas with insurance companies, you can take your money elsewhere and you can tell your insurance provider that you are doing that because you are not happy with what they're doing. And if you were to move your money, you should totally do that. Cause I can tell you they're definitely logging somewhere, why people are leaving. And you'd hope that at some point that would get to a critical mass whereby they really start to think about it. There is just a complete lack of understanding of the role of the investment system on the whole, like I said, at the start, there's a broad understanding of the role companies play in the climate crisis.

(25:58):
People get that politicians have a role, but there's much less of a spotlight on investors in the investment community. And I really do think that's a problem, right? Because most companies get a lot of their power from being able to draw investors who give them money. And if you haven't got investors using their power through these kind of votes at AGMs to kind of kick directors off the board who are like really into fossil fuels, for example, then company directors are getting a free hand. So I think it's really important to just understand that a broad, like lack of awareness around the role of the investment community, is a problem because the more spotlight there is on these actors, the more likely it is that they're gonna step up and have to take these things seriously. So tell your friends about it, tell the people in your workplace because it's, it's really important.

(26:41):
Yeah. And that kind of leads to my last question. So this show is about empowering citizens to take action on the climate crisis. So what can people do today when it comes to investments and money to address this problem?

(26:53):
I think there are lots of things people can do to address this problem. I think the first step always has to be figuring out what the financial institutions are that you're connected to. We spoke about banks, pension funds, general investment accounts and insurance companies map out who they are as a starting point. Cuz a lot of people don't know quite where they're connected. If you're at a university that universal will be investing money as well. So map that out does something for today. And then maybe later in the week, see if you can do some research as to how it's being invested and then figure out what options you have to move that money. If you wanna move it, someone more responsible, always helpful to start with a personal I think, but I'd also say definitely think about the kind of structural change that needs to happen because we're probably never gonna change the system by all like us individually or moving our pot of money. Like we need broader collective change. So do look out for organizations like share action that are running these campaigns or there's one called there's an investment organization called Share in Canada. And in US you've got an organization called as you. So have a look at who the kind of organizations are doing that kind of work in your area because they'll be campaigning for policy reform running these big shelter resolution campaigns that really try and in a kind of more structural and systemic way change what's happening in the system.

(28:07):
Well, Michael, yeah. Thank you so much. This has been so valuable to learn about money and investments and, and how that whole system works. So thanks so much for coming on the show.

(28:16):
Thanks for having me, Michael, it's been a pleasure.

(28:19):
Well, that was my talk with Michael. I think the most interesting thing that I hadn't thought about before was investing in fossil fuel companies so that you have a seat at the table and you can make that change from the inside. To me, that was something that was new and potentially very effective. And don't forget to check out our website, www.inovermyheadpodcast.com. There are other shows I've been on and photos of the tiny house. There's lots there. So check it out. Well, that's all for me. I'm Michael Bartz, here's to feeling a little less in over our head when it comes to saving the planet. We'll see again, soon. In over my head was produced and hosted by Michael Bartz, original theme song by Gabriel Thaine. If you would like to get in touch with us email info@inovermyheadpodcast.com. Special thanks to Telus STORYHIVE for making this show possible.

(29:05):
I'm trying to save the planet. Oh, will someone please save me?