The lost plot

Is anyone surprised that nothing was achieved at the COP25 summit? How is it possible that 27,000 disciples knelt at the altar of the UNFCCC to listen to a pigtailed teenager and came up empty handed?

UNSG Antonio Guterres lamented, “I am disappointed with the results of COP25…The international community lost an important opportunity to show increased ambition on mitigation, adaptation and finance to tackle the climate crisis.”

What annoys FNFM is the sanctimonious shame culture that consumes these meetings. Heretics are outed and slammed. Australia is never far away from a beating. Yet the show goes on. COP26 will misuse data and amplify the hysteria.

Even more disturbing is how this woke behaviour is finding its way into our financial institutions.

Instead of looking to diversify earnings and maximize shareholder returns they are taking stands on climate change. The Big 4 Aussie banks refuse to invest in anything related to the Adani coal mine. Another 35 global banks will do likewise.

One could make a clear case against investment were the Adani coal mine to carry excessive financial risks but it doesn’t. The end user in India has a giant thirst for decades. This is money for jam.

Bank boards should ask themselves, since when did any customers seek climate advice from their loan managers? It is ludicrous.

APRA should forget regulating the banks over fees or charging dead people but question the economic rationale behind decisions like Adani. It is not to say banks don’t have a right to deploy capital as they deem fit but there should be a sensible purely financial explanation behind it, not one wrapped in ideological dross.

The ultimate irony here is that banks, forever showing diversity in the workplace, don’t seem to want to apply it to the loan book which is so ridiculously skewed to mortgages. There is nothing prudent about that.

So maybe the UN COP summits are having the desired effect behind the scenes. Howl at the moon long enough and get teenagers to scream “how dare you” to shame our banks into folding to local public pressure, which in reality amounts to a handful of misguided students with placards and Twitter accounts who wish to wag class.

Wouldn’t it be ironic if a housing collapse sent some of our heavily geared Aussie banks toward insolvency which could have been averted were they to have made a rational decision to lend to Adani, the very business they told us would kill them.

On a final note, how do we have banks disinterested in taking advantages where little competition exists? Isn’t that the holy grail of financial strategy?

The beauty behind Adani (and other projects like it) is simple. No need to embark in competitive intelligence to find out what their banking rivals are doing. Just listen to their public statements on what they aren’t doing and take the spoils. Higher margin and lower risk. It is not rocket science.

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