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Still Coughing up for Coal: Big Banks after the Paris Agreement

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BankTrack, with its international partners Rainforest Action Network in the US, Friends of the Earth France, urgewald in Germany and Market Forces in Australia published the report ‘Still Coughing up for Coal: Big Banks after the Paris Agreement‘ in November 2016, during the second week of COP22 in Marrakesh. The report analyses the coal policies in place at 22 major commercial banks from the US, Europe and Australia, and the implementation of these policies, one year on from the ‘The Coal Test Report – Where Banks Stand on Climate at COP21’.

This analysis comes after a wave of new commitments from big banks on coal over the past two years, which are all listed on this page with a summary and several links on each of the different announcements.

As of November 2016, and as indicated in the analysis table below, as regards the direct financing of coal projects worldwide there are:

  • Seven major banks which have declared an end to the financing of new coal mines
  • Four major banks which have declared an end to the financing of new coal plants.

For indirect financing (that is, the financing of coal companies, not coal specific projects), the new report describes three different approaches being taken so far :

  • the ‘exclusion’ approach by European banks
  • the ‘reduction’ approach by US banks
  • The ‘2°C alignment’ approach by Australian banks.

The report also highlights several recent ‘coal dodgy deals’ which reveal the poor implementation of these new coal policies by the banks concerned, as well as some of the policy loopholes which permit heavy support to coal from the banking sector:

  • Issues with implementation of old policies: Punta Catalina in Dominican Republic
  • Issues with timing of implementation of new policies: TJB2 and Cirebon 2 in Indonesia
  • Issues with some policies only applying to new customers, not existing ones: SUEK in Russia
  • Issues with insufficient level of thresholds adopted in policies: Uniper, Vattenfall and EPH in Germany
  • Issues with implementation of coal exposure reduction commitment: Peabody in the US.

The multiple ‘FAIL’ policy gaps in our table stress the inconsistency between big banks’ insufficient coal restrictions and the fact that, as the Sydney Morning Herald puts it in an article covering the report, “The reality of addressing climate change is that financing must change dramatically if emissions are to be curbed.”

The report therefore calls on banks to take these concrete steps:

1. Stop all financing that would expand the coal industry.

2. Reduce exposure to coal companies to zero by 2020, to ensure a managed decline of existing coal infrastructure.

This must be the first part of a Paris Agreement roadmap for banks – for the coal sector, which is the most incompatible with the agreement’s objectives – and it must be complemented by action on other fossil fuels and climate-destroying activities.

Right now, anything less, and the world’s banks are set to drive us to disaster.


Source: BankTrack



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