Granted it’s still early in 2022, but signs are emerging
that the amount of financing going to coal-related projects is running at a
rate that’s more than double last year’s pace.
With the first quarter coming to a close, banks (mostly
based in China) have helped coal companies raise $9.9 billion via loans and
bond sales, according to data compiled by Bloomberg. For comparison, the number
was closer to $4.4 billion during the first three months of 2021.
While the biggest chunk of the coal money is being
accumulated for Chinese coal endeavours, the increase nevertheless runs counter
to all the global banking sector chatter about its supposed commitment to
helping the world cut dangerous emissions. And there’s no more dangerous fossil
fuel than coal—the single largest source of global temperature rise.
“It’s amazing that the numbers are so big,” said
Alison Kirsch, research and policy manager at Rainforest Action Network, which
published its 13th annual “Banking on Climate Chaos” report on
The world’s 60 largest banks have helped raise about $4.6
trillion — in total — for oil, gas and coal companies since the Paris climate
agreement was announced at the end of 2015, according to Rainforest Action,
citing Bloomberg data among other sources.
How is it possible in 2022 that “banks are still
financing coal?” Kirsch said.
Bankers put coal in “the penalty box” in 2015 when
they started drawing a line around mining of the combustible, black-sedimentary
rock, she said. Since then, it looks like coal got back out on the ice. The
data show coal financing close to doubled in 2017 and has remained elevated
Coal power needs to be phased out by nations in the
Organisation for Economic Cooperation and Development and the European Union by
2030—and by 2040 in the rest of the world—to meet the goals of the Paris
Agreement, Kirsch said, citing reports from the United Nations and Climate
Increasing coal investment makes this more difficult.
Some banks seem to be trying. HSBC Holdings Plc promised
earlier this month to “phase down” its exposure to fossil fuels, sending
a warning to oil and gas clients. The bank said it will look at updating its
wider financing polices, including those for conventional and unconventional
oil and gas, methane emissions and environmentally critical areas such as the
Arctic and Amazon.
As for coal, HSBC said in December that it plans to stop
financing the industry by 2040. And despite HSBC’s large China presence, the
bank has done little in recent years to help coal miners raise money through
the debt markets, Bloomberg data show.
Instead, the leaders in this area have been lenders such as
China Securities, an affiliate of Citic Securities, and Industrial Bank, a
mid-sized Chinese bank based in Fuzhou.
The main conclusion from the Rainforest Action publication
is that runaway funding for fossil-fuel extraction and infrastructure is “causing
climate chaos and threatening the lives and livelihoods of millions.” And
notably, the inability of bankers to cut off the spigot to coal is “just
horrible,” Kirsch said.
The conversation around coal has been growing
since Vladimir Putin launched his war on Ukraine. Europe relies on natural gas from
Russia, and the war has prompted nations, including Germany, to consider
keeping open their coal plants.
“The big picture here is this is a moment to rapidly
uptick the movement toward renewables, and instead, the opposite is happening,” Kirsch said. “We
aren’t accelerating the transition.”
Rainforest Action, which along with other climate-focused
nonprofits including BankTrack, Reclaim Finance and Sierra Club that compile
the report, has developed scores for banks.
Not too surprisingly, those that rank among the lowest have
been lenders that extend the most funding to fossil fuels, namely JPMorgan
Chase & Co. and Citigroup Inc. Wells Fargo & Co. has rated among the world’s top
fracking banker and Barclays Plc has placed at the bottom of the pack in
Europe. As for coal, Industrial Bank has been among the biggest bankers of
“It’s pretty stark,” Kirsch said. “It’s past
the time for every bank in every country to immediately end their support for
the expansion of coal mining and power.”