Recent years have seen a remarkable decline in the coal industry’s fortunes, and a simultaneous, unprecedented rise in the financial industry’s desire to put responsible investing and lending at the core of its business. However, while many banks and investors are taking their duty to not financially back destructive industry seriously, the task of mainstreaming policies that will reduce coal use quickly enough is incomplete.

Europe needs to be coal free by 2030 at the latest if we are to have a chance at avoiding climate breakdown. Not only will the coal companies that do not change be swimming against an increasingly strong tide of regulations and a worsening economic environment for non-renewable sources, but the investors and creditors associated with them will be putting themselves at greater and greater reputational and financial risk by association.

Therefore, any financial ties to Europe’s most polluting utilities must either be coupled with forceful coal company engagement calling for a coal phase out in Europe by 2030, or support to these companies must cease altogether.

This report takes a close look at those eight European financial institutions with the most significant ties to the eight most polluting utilities in Europe. Financial ties are defined as issued loans and underwriting services, bonds and underwriting.

Only a handful of utilities are responsible for half of all EU coal-based CO2 emissions: RWE, PGE, EPH, Fortum/Uniper, ČEZ & Enel/Endesa. These financial institutions, who we name as the ‘Exposed Eight’, have supported these key utilities with almost €16 billion, since the Paris Agreement was agreed in December 2015.

This research finds that the most important investor associated with these utilities, the Norwegian Government Pension Fund, has invested €2.3 billion in shares and bonds. Other highly coal-exposed investors include Deutsche Bank, Crédit Agricole and Standard Life Aberdeen .On the creditor side, UniCredit was the largest bank providing €3.1 billion in loans and underwriting services, followed by Santander, Barclays and BNP Paribas.

Generally, financial Institutions have also begun to be part of the solution, and are not just part of the problem. While some financial institutions continue to gamble on coal’s ever-worsening future, many have already put policies in place which restrict their financing of coal, including several of the ‘Exposed Eight’.

The exclusion of the most polluting utilities is already being implemented, or is imminent, and investor dialogue with utilities for more progressive strategies is taking place. However, these engagement efforts must be elevated through appropriate public messaging. The conversations and engagement processes are mostly not shared publicly and the assertiveness of the financial institutions is not transparent. Overall, most policies already in place will need considerable tightening so that they – and that is what counts – result in early coal plant and mine closures.

The reality is: what was once a golden investment is now a foolhardy one. There is an incredible hunger for change among financial institutions. The utilities that resist will find themselves facing divestment, and the investors and creditors that stick with them at any cost will be left with nothing but stranded assets.