February 27, 2019 Read More →

Banks around the world opt to offload coal

dw.com

One-hundred global financial institutions have introduced policies restricting coal funding, according to a new report. Coal companies are finding it harder to access capital markets for expansion, but China still lags.

The 100 global financial companies that have cut back on coal funding include 40 percent of the top 40 global banks and at least 20 globally significant insurers, with over $6 trillion (€5.4 trillion) of investments under management, or about 20 percent of the coal industry’s global assets, a new report says.

The report by the UK-based Institute for Energy Economics and Financial Analysis (IEEFA), noted that since 2018 there had been 34 new or significantly improved announcements from global financial institutions restricting coal.

Coal accounts for almost half of global energy-related CO2 emissions.

“Since 2013, coal exit announcements have occurred at a rate of over one per month from globally significant banks and insurers holding more than $10 billion worth of assets under management,” the IEEFA said in a statement.

Tim Buckley, director of Energy Finance Studies, IEEFA, said: “For environmental, reputational and financial reasons, thermal coal is a toxic asset for global investors increasingly announcing new and improved policies responding to climate change.”

“The pattern of tightening existing policies combined with new lending restrictions is creating a domino effect within the global financial industry while resulting in a progressive strangulation of the thermal coal industry. Stranded assets are a clear financial risk for any institutions left funding the coal sector,” he went on, adding that investors are focused on cheaper, sustainable, domestic renewables.

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