Coal, the most carbon-emitting and polluting source of energy, is the biggest contributor to man-made climate change. Global coal-fired power generation rose 9% last year to a record high.
According to the study, the main coal lenders are Japanese financial group Mizuho, Barclays, Citi and JPMorgan Chase. All four banks are members of the UN Net Zero Banking Alliance and have committed to aligning their portfolios to net zero carbon emissions by 2050.
Topping the list was BlackRock, which held 9% of global coal stocks. About $110 billion of its equity is invested in coal-producing companies and $34 billion is invested in companies building new coal-fired power plants, according to the report.
BlackRock’s holdings represent a small percentage of its $10 trillion in total assets under management, but the coal developers in BlackRock’s portfolio have plans for new projects equivalent to the power capacity of the whole world. coal in Russia, Japan, Indonesia, Poland and Germany combined.
BlackRock declined to comment.
JPMorgan Chase, Citi, Wells Fargo and Bank of America are the world’s top four fossil fuel funders, according to the report, with Morgan Stanley and Goldman Sachs rounding out the top 14. Together, these six US banks provided 31% of all financing linked to fossil fuels since the Paris Agreement of 2015 and 29% of all financing identified in 2021. The six banks are part of the Net Zero Alliance.
Some investors have had enough: The six largest U.S. banks will face investor resolutions over funding fossil fuel companies at their annual shareholder meetings this spring.
Bank policies on coal financing typically have loopholes that allow financing to continue through multiple channels. Banks may restrict funding for specific projects involving coal, but do not rule out general-purpose loans or deals for an entire company.
Many banks produce intermediate targets based on measures of carbon intensity, measured as total carbon emissions divided by the total number of units of production or economic activity. “It’s a tricky trick and it doesn’t mean their total emissions are going down,” Cushing said. If you fill your car with a low-emission form of gasoline, but drive twice as far, your emissions intensity will be lower, but your net emissions will remain the same.
Companies often say they need time to assess client portfolios and figure out how to continue working with them
Exhibit A: Western oil and gas companies severed ties with Russia almost immediately after the invasion of Ukraine, proving that even the biggest companies can quickly dump toxic assets.
give us time
A spokesperson for the United Nations’ Net Zero Banking Alliance (NZBA) said comprehensive transition plans “will take years to plan and execute”. Many alliance members are only months away from their net zero pledges in 2021, the spokesperson said.
An immediate divestment from existing fossil fuel positions could lead to “extreme market shocks” that could “have a profound impact on the world’s most vulnerable people”, the spokesperson added.
Other financial institutions contacted by CNN Business asked to speak on the merits, did not respond, or simply sent links to their publicly available coal and net-zero policies.
BlackRock has divested from all companies that derive a quarter or more of profits from thermal coal in its $2.6 trillion actively managed strategies. The majority of the company’s $10 trillion under management is held in passive funds to which the coal policy does not apply.
But time is running out.
It’s not everything about money, especially
Global coal-fired power generation rose 9% to a record high last year, and U.S.-based Peabody Energy, the world’s largest private coal producer, had its most profitable first quarter ever. its history this year.
Russia’s invasion of Ukraine and a possible ban on Russian coal in the European Union have also made coal an extremely profitable commodity. This week, US coal prices rose above $100 a ton for the first time in 13 years in response to supply shortage fears. The cost per ton was around $54 at this time in 2020, when Russian coal accounted for around 18% of all global exports.
“This could be a watershed moment for the world,” said Natasha Ion, climate activist at BankTrack, an NGO focused on tracking banks and the activities they fund. “We are already seeing markets change in response to Russia. I urge banks not to increase fossil fuel financing as a result.”