Research shows how banks, investors finance the coal industry
A bulldozer pushes coal onto a conveyor belt at the Jiangyou Power Station on January 28, 2022 in Jiangyou, Mianyang City, Sichuan Province of China.
Liu Zhongjun | China News Service | Getty Images
LONDON — Banks and investors have channeled massive sums of money to support the coal industry in recent years, according to new research, propping up the world’s dirtiest fossil fuel at a time when humanity is facing a climate emergency.
Analysis published Tuesday by campaign groups Urgewald and Reclaim Finance, alongside more than two dozen other NGOs, found that commercial banks channeled $1.5 trillion to the coal industry between January 2019 and November last year.
The research shows how a tiny number of financial institutions from a handful of countries play an outsized role in keeping the coal industry afloat.
Indeed, financial institutions from just six countries — the U.S., China, Japan, India, Canada and the U.K. — were seen to be responsible for more than 80% of coal financing and investment.
“These financial institutions must come under fire from all quarters: civil society organizations, financial regulators, customers and progressive investors,” Katrin Ganswindt, head of financial research at Urgewald, said in the report. “Unless we end financing of coal, it will end us.”
Coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most critical target for replacement in the transition to renewable alternatives.
Fog shrouds the Canary Wharf business district including global financial institutions Citigroup Inc., State Street Corp., Barclays Plc, HSBC Holdings Plc and the commercial office block No. 1 Canada Square, on the Isle of Dogs on November 05, 2020 in London, England.
Dan Kitwood | Getty Images News | Getty Images
Who are the top lenders to coal clients?
The findings outline all corporate lending and underwriting for companies on Urgewald’s Global Coal Exit List but exclude green bonds and financing that is directed toward non-coal activities. The GCEL refers to a list of 1,032 companies that account for 90% of the world’s thermal coal production and coal-fired capacity.
It is the first GCEL finance research update since the COP26 climate conference was held in Glasgow, Scotland late last year. Campaigners say it is for this reason that the analysis should be seen as a benchmark to assess the integrity of promises made at COP26.
Banks like to argue that they want to help their coal clients transition, but the reality is that almost none of these companies are transitioning.
Katrin Ganswindt
Head of financial research at Urgewald
Major coal-dependent nations at the U.N. talks pledged for the first time to “phase down” coal-fired power generation and inefficient subsidies for fossil fuels. A last-minute intervention to amend the terminology of the Glasgow Climate Pact to “phase down” rather than “phase out” sparked fears among many it would create a loophole to delay desperately needed climate action.
“Banks like…
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