"We target banks, insurers, investors, but also normative institutions, meaning regulators and public decision-makers, whether at the national or European level, as well as what I call the hidden actors of finance, who contribute to shaping the behavior of these financial actors,” explains Lucie Pinson.
To achieve its goal, Reclaim Finance pursues three main axes. The first is to cut funding to fossil fuels. The second is to use financial leverage to transform sectors like steel or electricity so that they produce differently. Finally, the third axis is to fundamentally transform the logics that permeate the sector.
So how do we compel actors who are naturally inclined towards short-term thinking to embrace a medium- and long-term horizon, particularly through the requirement to adopt and implement a transition plan?
It involves framing and controlling the practices of financial actors, or conducting campaigns to highlight the gap between promises or what should be done and the reality of practices, for example by putting market actors in competition.
"The main risk we highlight is the reputational risk,” explains Lucie Pinson. “The majority of the population is concerned about the consequences of climate change. Therefore, there is a risk for public or private institutions not to act on this issue and instead be seen as one of the contributors to the climate catastrophe that is worsening every day.”
This reputational risk has economic and financial impacts, in terms of lost opportunities for new contracts with investors or public markets that are subject to sustainability criteria; loss of clients who have decided to turn to more responsible institutions. It can also have a direct impact on stock prices.
Reclaim Finance also aims to combat greenwashing, “which collectively lulls us to sleep,” explains Lucie Pinson, by denouncing the grand announcements from financial actors who claim to be committed to climate action or falsely green savings and investment products.
“Greenwashing is everywhere, whether at the level of institutions and of course in savings and investment products. The majority of products labeled as responsible still contain companies that are developing new fossil fuel projects. For example, life insurance products, unit-linked accounts, or employee savings products, even if they are labeled responsible, contain companies that are developing new oil and gas fields in 70% of cases,” explains Lucie Pinson.
Therefore, there is a need for regulation to prevent this greenwashing. This means establishing strict rules, conducting checks on labels and major declarations, ensuring that regulators have the means to monitor the practices of financial actors and sanction if necessary.
"Controlling the labels that are placed on savings and investment products is essential to avoid misleading the final saver,” argues Lucie Pinson. “But we will still need to regulate all financial products to ensure compliance with planetary limits that are non-negotiable.”
