Boris Johnson’s new investment council includes a subsidiary of a German energy giant that is suing the Netherlands for €1.4bn for phasing out coal.

The Investment Council, which launched last month to drum up foreign investment into the UK, has talked up the importance of ‘sustainable’ investment and ‘green industries’ ahead of the COP26 Climate Summit.

But the council’s advisers include RWE Renewables, whose parent company took the Netherlands to a World Bank arbitration tribunal after the Dutch government decided to phase out coal.

The government’s announcement of this new advisory body quoted RWE Renewables CEO Anja-Isabel Dotzenrath saying that “the council will create the right framework for sustainable investment” in the UK.

Other members of the council, which aims to increase foreign direct investment in Britain, include executives of giant banks that have together invested more than £300bn in fossil fuels over the past five years.

Scientists for Global Responsibility’s assistant director, Andrew Simms, told openDemocracy: “A new, sustainable future will not be built by relying on people trapped in old ways of thinking… A meaningful transition to a clean energy system can't be well guided by those with fossil fuels still in their business veins."

Farhana Yamin, one of the world’s best-known climate change lawyers, said: “The financial sector funds climate destruction and needs to clean up its act. It makes no sense for senior figures from complicit financial institutions being put in public positions. They have a massive conflict of interest.”

The government says that the council will advise on Britain’s inward investment strategy. Its announcement said the UK would this year “host a Global Investment Summit to secure foreign investment in UK green industries of the future” ahead of November’s COP26 Climate Summit in Glasgow. 

Seven of the 40 council members are leaders of companies that have sued countries – over a range of issues – via the same controversial investor-state dispute settlement (ISDS) system that RWE is using to sue the Netherlands after the Dutch government decided to phase out coal by 2030.

The RWE suit claims the Dutch government has violated the company’s rights under what is called the Energy Charter Treaty – a huge and controversial international trade deal that is focused on the energy sector.

Recent research by Investigate Europe found that €141bn of energy assets in the UK are covered by this treaty – causing concern that the UK government could face a wave of similar suits if it takes bolder action to cut emissions.

Global Justice Now campaigns and policy manager Jean Blaylock told openDemocracy: “‘Corporate court’ cases like this are some of the biggest obstacles to governments taking climate action. If the UK government really wants to ‘build back better’, they must not take advice from companies like RWE.”

“RWE built a coal power station [in the Netherlands] at a time when the need to stop fuelling the climate emergency was already clear,” Blaylock added.

A spokeswoman for RWE told openDemocracy that the company had set a carbon neutrality goal by 2040. “We are committed to the phase out of coal. [The Dutch case] doesn’t change our long term ambitions as a company and our commitment to renewables,” she said.

A Tory donor and more coal

Egyptian-British businessman Mohamed Mansour also has a council seat. Mansour is a long-standing Conservative donor. Last year openDemocracy revealed he had given £125,000 after one of his companies received a major government export deal. (Mansour said that the deal "was concluded prior to me making the donation and the Conservative Party had no role whatsoever.")

Representatives from four banks were also appointed to the advisory group – Citi, HSBC, Santander and UBS. Between them, these banks have invested more than £300bn in fossil fuels since 2016, according to the recent report ‘Banking on Climate Chaos’ by the Rainforest Action Network.

The council’s other members include Engie, which has coal-fired power plants around the world. It says it will divest from coal by 2027 but is one of a few major European utility companies without a net-zero emissions target.

The new council “will cement the investor lens” in government strategy, and will meet twice a year, and at other times as needed, “to provide high-level strategic advice”, the announcement said.

It should also “advise on policy and regulatory changes” to attract foreign investment, and “signal to our global partners that the UK is ready and open for business as an independent trading nation.” 

Minister for investment Gerry Grimstone, who will chair the council, said it is part of the UK’s post-COVID-19 recovery plan and it “will deliver the expertise of influential global investors right to the heart of government”.

Grimstone is a former chairman of Barclays which, since his departure, has been criticised for increasing its support for fossil fuel companies despite announcing that it would target net zero carbon emissions by 2050.

Council members also include the airplane giant, Airbus. Planes sold by the company in 2019 and 2020 will produce more than one billion tonnes of carbon dioxide during their lifetimes, according to recently released estimates.

Aviation accounts for about 1.9% of global greenhouse gas emissions.

‘We cannot buy our way out of this crisis’

“Boris Johnson – himself a father – should consider what he wants his legacy to be: sustaining a dying fossil fuel economy, or creating a livable world for all our children,” Maya Mailer, co-founder of Mothers Rise Up and campaigns lead for Our Kids’ Climate, told openDemocracy.

“The banks and institutions set to advise the UK government have [been] and still are complicit in the destruction of the climate, the violation of Indigenous and human rights, and harms to public health,” added Osprey Orielle Lake, executive director of Women’s Earth and Climate Action Network.

“What is needed now from governments and investors alike is immediate action to invest in community-led solutions, ecological sustainability, and human and Indigenous rights, as we face the unprecedented challenges of a world in climate chaos,” she said. “We cannot buy our way out of this crisis."

Weapons manufacturer Lockheed Martin also has a seat on the council.

Council members are unpaid, and the government said their appointments were made “in strict accordance with Cabinet Office guidance”.

The government’s announcement could attribute only 56,000 new jobs created last year to foreign investment.

The Department for Business, Energy and Industrial Strategy told openDemocracy that the Investment Council’s members come from a broad range of sectors and include global investment leaders with significant expertise of international markets.

Additional reporting by Nandini Archer

This piece was edited on May 12 to clarify that Mohamed Mansour's company received a trade finance guarantee from UK export finance before he donated £125,000 to the Conservative party.