British bank support for the coal industry has increased since 2015 Paris Climate Pact | Banking
Financial support from British banks to companies involved in the coal industry has increased since the 2015 Paris Agreement, despite their promises to end funding for a sector seen as a major obstacle to the fight against global warming.
UK lenders have provided loans and underwriting services worth $ 30.3 billion (Â£ 21.9 billion) to companies that have sold or burned coal, or provided services to the coal industry, in 2019, the latest year for which full data is available, according to research by campaign groups Reclaim Finances and Urgewald. This is a significant increase from the $ 21.5 billion in funding provided in 2016.
Barclays was by far the largest UK provider of corporate finance to the coal industry, followed by HSBC and Standard Chartered, according to the study.
Burning coal produces more carbon dioxide emissions than other fossil fuels, including oil and natural gas, and its rapid phase-out is widely seen as a key element in ending the climate crisis.
However, activists have criticized banks and other financial firms such as insurers and asset managers whose phase-out plans allow them to continue to profit from coal for years to come.
The United Kingdom is the world’s third-largest lender to companies in the coal industry, behind the United States and Japan. The discovery comes as the UK prepares to host the UN’s Cop26 climate talks in November. As part of the Paris climate agreement, 189 countries have agreed to limit global warming to well below 2 Â° C, the scientifically advised safe limit.
Lucie Pinson, Executive Director of Reclaim Finance, said: âThe City of London is not lifting a finger to end its deadly reliance on coal, even if it means ruining the UK’s reputation on the climate. Internationally, the UK government has sought to lead a global exit from coal, but the financial sector has clearly not received the memo.
Barclays provided loans and guarantees (the purchase and resale of debt or equity for companies raising funds) worth $ 17.5 billion in 2019 for companies on the world coal exit list, a database of companies with significant coal-related profits. This included funding from mining company FTSE 100 Glencore and Finnish and US energy companies Fortum and Duke Energy, according to the report.
HSBC provided $ 6.5 billion in financing in 2019 to companies with interests in coal. He has already funded companies like Indonesian PLN and South Korean Kepco. Standard Chartered provided services worth $ 4.6 billion in 2019 and funded Indian companies Adani and Power Finance Corp, as well as South Korean company Posco.
Between January and October 2020, these three banks provided an additional $ 19.2 billion in coal financing – the same amount as for 2016 as a whole.
The data comes as investors increasingly pressure banks to improve their track record on climate issues. Barclays will face its second consecutive shareholder climate vote on Wednesday on a resolution urging it to phase out services to coal, oil and gas companies.
Market Forces, the environmental group that organized the shareholders’ resolution, says the bank has yet to prove that its work with polluting companies is aligned with Paris climate goals.
Barclays said it adopted its climate policy last year, saying it could meet net zero emissions targets without phasing out fossil fuel customers, and instead help them transition to greener business models.
A group of 16 influential investment firms – including Amundi, Man Group and the government-backed pension plan Nest – wrote to Barclays chief executive Jes Staley last week urging him to tighten his policies. However, it is understood that some of the investors will likely give Barclays more time to implement existing commitments before exerting further pressure.
Barclays said: âThe board continues to believe that Barclays can make the biggest difference by supporting the transition to a low carbon economy, rather than simply removing support for some of the customers there. more engaged. “
The bank said the majority of funding for coal covered by the research took place before it began aligning its work with the Paris agreement in March 2020. It will gradually limit funding to companies that earn significant income. coal.
Barclays, HSBC and Standard Chartered have said they do not provide direct financing to new coal projects, although that does not take into account financing of conglomerates with more diverse companies.
HSBC has announced that it will release a plan by the end of the year to phase out funding for coal-fired power projects or thermal coal mines in wealthier countries by 2030. HSBC’s word said the bank would help customers “gradually decarbonize” but that it would also aim to “maintain economic stability.”
A spokesperson for Standard Chartered said the company had “made major progress in our coal policy over the past few years” and would continue to review its position..