Business as usual?

Thirty-eight kilometres off Portugal’s bathing and surfing beaches, four raw materials companies are searching for oil and gas in the sea. In itself, this would hardly merit a mention – after all, our planet’s raw materials are already being plundered everywhere – were it not for the fact that there have been protests, sometimes fierce ones, from all parts of society that are concerned about social and ecological issues. Even some areas of business are signalling a clear rejection, especially tourism, which is responsible for 10% of the country’s income. There’s an outcry.

There are three questions. Why are companies still allowed to prospect for fossil fuels when it has been definitively known since COP21 that extracting and burning hydrocarbons is responsible for global warming and environmental destruction, and the plan is to phase out fossil fuels? Why continue to search for fossil fuels and then “burn up” investments worth hundreds of millions when it is clear to all those involved that oil and gas are flooding the current commodity markets, are being traded at lower and lower prices, and are unlikely to produce any real return? Why search for fossil fuels offshore when we will forever be haunted by the images of BP’s burning “Deepwater Horizon” drilling platform in the Gulf of Mexico and we meanwhile know only too well what environmental catastrophes can be caused by oil spills in the sea and on the beaches of the Algarve?

Seismic activity off the Portuguese coast is nothing new. It is also well known that investments in regenerative energies can produce a sustainable return. It is the business of (old) men who think in a linear manner, who are determined to get their own way and, in public hearings, reel off the mantra of job creation and energy dependence on the Middle East. Ecological and socially responsible sustainability always ranks lowest in their thinking and only according to the following axiom: we can only afford natural and environmental protection if the returns are right.

This old understanding of economics builds on a design fault in business accounting. An economy is only managed in a forward-looking manner if a society’s total assets – in other words natural areas, biological diversity, secure supplies and resources in particular – are not consumed, but are conserved and multiplied. Anyone looking more closely at the figures of these companies will perhaps ask how it is that the balance sheets only contain prices and balance sheet values that do not reflect the economic truth in the slightest: why they are allowed to plunder our planet’s resources worldwide and unhindered without being called to account for this in ecological terms?

The reason for this is the incomplete nature of business accounting, which measures the processes of financial management. This, in turn, is based on outdated legal thinking whereby the ground, the waters and the air are not common property that should be protected but may be subjected to limitless commercial exploitation. This type of thinking overlooks the duty to invest in finite natural and social capital and tolerates the plundering and devastation of our planet by raw materials companies operating globally. This has fatal consequences, because it creates hidden economic risks on an unknown scale for future generations. That is why the accounting process urgently needs to be supplemented in order to give a complete picture of total assets in each financial year. Because a balance sheet only becomes meaningful when it depicts the whole economic situation.

This also involves governments and their executive authorities forbidding encroachments on nature through the extraction of raw materials or through the depositing, discharge or emission of residues and toxins from commercial and industrial processes, or at least applying such high taxes that natural areas, biological diversity, secure supplies and resources are conserved.