Climate: Big banks back away from coal industry

The U.S. is the second-largest producer of coal in the world, thanks in part to massive surface mines like this one in Wyoming. Photo courtesy BLM.
Reducing financial support for the coal industry will help speed the transition to a low-carbon economy. Photo courtesy BLM.

New energy era on the horizon?

Staff Report

Citing concerns about climate change, major financial institutions today announced they are backing away from financing the coal industry. As the COP21 climate talks started in Paris, Morgan Stanley said its policy changes cover both lending and underwriting, with a long-term view toward ending financing for coal-fired power plant construction in developed countries.

The policy changes follow similar coal financing cuts at eight other banks earlier this year (Bank of America, BNP Paribas, Citigroup, Crédit Agricole, ING, Natixis, and Société Générale). Morgan Stanley’s commitment came after public pressure from climate activists as part of a campaign launched by Rainforest Action Network in October, as the group sought to hold U.S. banks publicly accountable.“Today Morgan Stanley and Wells Fargo announced they are cutting support for the coal mining sector, adding momentum to recent commitments made by Bank of America, Citigroup, and several others,” said Lindsey Allen, Executive Director of RAN. “While the policies announced today do not go nearly far enough to realign the banking sector with the reality of climate change, they are a clear indication that major banks agree coal is an increasingly foolish and unacceptable investment.”

Notably, Morgan Stanley’s coal policy statement acknowledges that the bank has a responsibility to contribute to the transition to a low-carbon economy and commits to report on the bank’s policy commitments to cut financing for coal mining and coal-fired power.

These policy announcements come on the same day that President Obama met with President Anote Tong of Kiribati and other leaders of small island states, who have called for a global moratorium on new coal mines. They also follow calls from the Paris Pledge, a global coalition of over 160 global civil society organizations which has urged the banking sector to phase out financing for coal mining and coal-fired power in the leadup to the U.N. climate conference underway in Paris, COP21.

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