The financiers and investors behind the global coal industry have been exposed by the Global Coal Exit List (GCEL), published by Urgewald, Reclaim Finance, 350.org Japan and 25 other NGO partners.
The research shows that commercial banks channeled over $1.5 trillion to the coal industry between January 2019 and November 2021.
Financial institutions from the US, China, Japan, India, Canada and the UK are responsible for over 80% of coal financing and investment.
The research displays all corporate lending and underwriting for the 1,032 companies on the GCEL; their activities range from coal mining, trading and transport to the conversion of coal to liquids, the operation of coal-fired power stations and the manufacturing of equipment for new coal plants.
‘It’s long been known that the coal industry is the number one driver of our planet’s rising temperature. But who is providing the loans, the underwriting services and the investments that allow these companies to keep on operating? Our research answers this question.
‘Banks like to argue that they want to help their coal clients transition, but the reality is that almost none of these companies are transitioning. And they have little incentive to do so as long as bankers continue writing them blank checks.’
Head of financial research at Urgewald
Between January 2019 and November 2021, 376 commercial banks provided $363 billion in loans to the coal industry, but just 12 banks accounted for 48% of total lending to companies on the GCEL.
The top five lenders in this ‘dirty dozen’ ranking are the three Japanese banks Mizuho Financial, Mitsubishi UFJ Financial and SMBC Group, Barclays from the UK and Citigroup from the US.
Ironically, 10 of the top 12 lenders to the coal industry (including the five banks mentioned above) are members of the Net Zero Banking Alliance.
‘At the time when it counts most – today – most of these banks are still channeling billions of dollars to the coal industry. It is not enough to make net zero promises for the distant future and only inch towards them reluctantly. The risk of stranded assets and more importantly, the risk of the climate crisis, is too great.’
350.org Japan finance campaigner
Between January 2019 and November 2021, 484 commercial banks channeled $1.2 trillion to companies on the Global Coal Exit List through underwriting.
12 banks account for 39% of total underwriting for the coal industry since 2019. The world’s top 10 underwriters of coal are all Chinese institutions.
The three institutions at the top of the NGOs’ ‘dirty dozen’ ranking are the Industrial Commercial Bank of China, the China International Trust and Investment Corporation and the Shanghai Pudong Development Bank.
The only non-Chinese bank among the top 12 underwriters for the coal industry is JPMorgan Chase from the US.
If lending and underwriting are viewed together, the following picture emerges: banks from only six countries – China, the US, Japan, India, the UK and Canada – were responsible for 86% of overall bank financing for the coal industry.
‘As the world’s biggest bank, ICBC is well-positioned to contribute to China’s impressive climate goals by defunding coal. And yet, ICBC’s involvement in controversial coal projects such as the Bengkulu coal power plant in Indonesia, and others all over the globe, has branded it one of the worst financiers of the climate crisis. ICBC is at a crossroads: they could decide to become the world’s leader in green finance and sustainability by leading the world’s transition from coal into renewable energy sources such as wind and solar, or they can carry on doing business as usual.’
350.org regional finance campaigner for Asia
With shares and bonds totalling $688 billion, US investors account for almost 56% of institutional investments in the global coal industry.
Investors from Japan account for the second highest share of institutional investments in the coal industry, with holdings of $102 billion.
Japan’s Government Pension Investment Fund alone holds bonds and shares in value of $28 billion in companies listed on the GCEL.
‘The expansion of coal infrastructure anywhere in the world is incompatible with the Paris goals and a failure to meet the Paris goals will disproportionately affect low-income countries in Asia, many of which are currently on the frontlines of the climate crisis. It is time for financial institutions in the region to reassess their internal investment policies, to put an end to coal projects around the world, and commit to climate-friendly financing,.’
NORLY GRACE MERCADO
350.org Asia regional managing director
At last year’s COP26 climate summit in Glasgow, over 40 countries agreed to phase out coal, the single largest contributor to the climate crisis.
For years, UNFCCC, UNEP, the UN Secretary General and even the IEA have warned that there can be no more investments in new coal plants and new coal mines.
However, this research identified institutional investments of over $469 billion – 38% of the $1.2 trillion total – in companies that are still developing new coal assets.
‘Despite the flood of net zero alliances and climate ambition statements by financial institutions during COP26, the vast majority of investors are still failing to do the obvious: End their support for coal developers and adopt coal exit policies that are in line with the 1.5°C target.’
Policy analyst at Reclaim Finance