Last week, temperatures crested at 40C (104F) in England, bringing the climate crisis to the fore and spurring a fresh wave of dismay. How is it, despite a steady drumbeat of extreme weather events, a rising tide of public outcry, and growing consensus across the political spectrum, that the world remains so profoundly far from the outer limits of the climate targets considered “safe”? The answer is increasingly located not in climate denial, but in a proliferation of non-solutions advocated by policymakers and business interests with varying degrees of earnestness and good intention, under the umbrella of “green capitalism”. These are proposals sold as urgent, pragmatic tools for cutting emissions or reversing ecosystem loss, but which in fact deliver neither. Take sustainable finance. By some estimates, assets invested with some sort of environmental, social and governance (ESG) criteria now top $35tn, prompting enthusiastic proclamations that private investors, driven by rational self-interest, are delivering a greener future. For many, it seems one really can “do well by doing good”. Unfortunately, this sense of triumph is based on little foundation. To begin with, criticisms of “greenwashing”, in which corporations and financial firms mislead customers and clients on the ecological or social credentials of their products, abound. But the problem cuts much more deeply than a few bad actors who bend the (typically voluntary) rules. Instead, the underlying motivation of ESG investing is not necessarily to achieve the “real world” positive outcomes. Rather the goal is to minimise exposure to risks – whether climate regulation or labour disputes – that could eat into financial returns. For this reason, many ESG funds hardly differ from “mainstream” funds and indices like the S&P 500 (the basket of the 500 largest US corporations). Vanguard’s flagship US ESG fund, for example, has its top holdings in Apple, Microsoft, and Amazon. Tesla edges in at number six, followed by two different share classes of Alphabet (Google’s parent company). It would be hard to argue that many of these would be the companies springing to mind when imagining investment in a decarbonised and ecologically thriving future. Nor do some of them have particularly sterling records when it comes to the “social” pillar of the ESG acronym, whether accusations of human rights abuses and forced labour in supply chains or allegedly illegal surveillance of workers. Advertisement Moreover, while many might reasonably expect a major ESG fund to be investing in the urgent transition to renewable energy and sustainable infrastructure, instead, more than 40% of the Vanguard fund is allocated to tech and financials. Energy and utilities, occupied by many of the firms we might imagine are at the heart of decarbonisation, together make up less than 1%. Importantly, this appears to be the rule, not the exception. While some specialist firms use their shareholding position to earnestly pressure companies to change their business models or allocate capital to upstart clean energy firms, much of the industry is interested not in directly financing a sustainable future but in ensuring their portfolios are aligned with one. In this sense, ESG can be much better understood as a means of betting on the likelihood of a greener, more sustainable future, rather than helping to build it. Indeed, in one particularly striking study, researchers found the strongest trait differentiating social-themed funds from their mainstream counterparts was investment in companies with relative lack of employees. From the perspective of minimising risks to private investors, this is perfectly logical: no labourers, no labour issues. From the perspective of driving positive social outcomes, it’s hardly cause for celebration. The logic underlying sustainable finance is a problem for the argument that markets are advancing a greener, kinder capitalism. Indeed, the trouble for green capitalism is that its proposed solutions strain to force the complexity of the climate and ecological crises into the narrow frame of “the market”, irrespective of whether the market is a viable arena for confronting them. As a result, these “solutions” are increasingly proving to be anything but. The imprint of green capitalism can be seen in everything from a fixation on carbon markets to the proliferation of ideas like “ecosystem services” and “natural capital”, which seek to divide ecosystems into discrete “stocks” that provide services to the economy. By this logic, a whale is valuable insofar as it captures carbon and impresses tourists. To many, the idea might seem absurd, but with $40bn in ecosystem service trading in 2018 alone, these concepts are increasingly mainstream. Claims of the scale of finance committed to net zero are not curtailing the trillions funnelled every year to the fossil fuel industry. Worldwide, despite some 23% of emissions falling under carbon pricing schemes, the impact of such schemes on overall emissions falls woefully short of IPCC targets. And despite glossy images of oil majors’ “nature-based solutions” and tens of billions in annual trading in ecosystem services, biodiversity continues to decline at staggering rates. We live in a society structured and defined by market relations, and the idea that market-based solutions are the best, most pragmatic, and often only path to resolving most problems is powerfully ingrained common sense. It is, admittedly, difficult to imagine an alternative. It is also urgent and necessary. The siren song of easy win-win solutions to unprecedentedly complex and systemic crises is powerful, but must be resisted.