15 July 2020

Fool’s Gold: Financial institutions waste billions on coal, undermining climate action

BERLIN, 15 July 2020 – European financial institutions and international investors and banks including BlackRock and the Japanese megabanks are keeping Europe’s terminally declining coal industry on life support, handing companies €12 billion in investment, and €9.8 billion in loans and underwriting in less than 1.5 years, according to a new report. Such financial support is risking Europe’s ability to hit UN Paris Climate Agreement targets, and hindering renewable energy development.

Fool’s Gold – The financial institutions risking our renewable energy future with coal [1] examines eight European, and four significant international, financial institutions with close ties to Europe’s eight most polluting coal companies, finding that all continued to pump money into companies responsible for half of all EU coal-based CO2 emissions in the year after the IPCC released its 1.5 degrees C special report in Oct 2018. 

Europe’s most coal-exposed investor was the Norwegian Government Pension Fund, which invested €1.5 billion in shares and bonds [2], closely followed by Crédit Agricole with €1.4 billion, Allianz with €1.1 billion, and Deutsche Bank with €1.0 billion. Internationally, BlackRock’s investments totalled €7.0 billion. On the creditor side, UniCredit was the worst offender, providing €2.8 billion in loans and underwriting services, followed by BNP Paribas with €2.1 billion, Barclays with €1.7 billion and Société Générale with €1.3 billion. The Japanese megabanks Mizuho Financial Group, Sumitomo Mitsui Financial Group (SMBC) and Mitsubishi UFJ Financial Group (MUFG) have provided loans and underwriting of €1.9 billion.

“These financial institutions knew very well when the UN Paris Climate Agreement was signed that exiting coal was an immediate priority. That they are to this day still supporting coal companies with billions of euros, after more unequivocal scientific guidance from the Intergovernmental Panel on Climate Change, means that the financial institutions are consciously undermining climate action,” said Kaarina Kolle, Senior Finance and Utility Coordinator at Europe Beyond Coal.  

European financial institutions have been releasing nearly one new policy per week limiting financial ties to coal companies [3] so far in 2020. While some financial institutions have recently adopted stricter coal exclusion policies, some remain too weak, and others need to be proven. Fool’s Gold shows that a huge amount of support for coal is still getting through overall. 

“Every financial institution we looked at claims to restrict coal, but the figures speak for themselves. Policies are often carefully crafted to look positive, while retaining money flows to dirty energy. It’s time to  draw a line in the sand: if companies do not have a 2030 coal phase-out plan, investors and banks must exclude them without delay,” said Kolle. 

ENDS

Contacts:

Kaarina Kolle, Senior Coal Finance and Utility Coordinator, Europe Beyond Coal
[email protected], +32 4 83 26 20 75 (Finnish, English). 

Greg McNevin, Communications Director, Europe Beyond Coal

[email protected], +49 1605 247 857

Notes:

  1. Fool’s Gold: The financial institutions risking our renewable energy future with coal is published by Europe Beyond Coal and its partners, BankTrack, BlackRock’s Big Problem, Ember, Fundacja “Rozwój TAK – Odkrywki NIE”, Friends of the Earth Finland, Friends of the Earth France, Greenpeace, Reclaim Finance, Re:Common, ShareAction, Urgewald and 350 Japan.
  2. For investors, the study covers shares and bonds (extracted Feb 2020, based on the most recent filing date). For creditors, loans and underwriting are taken into account since the IPCC Special Report on Global Warming of 1.5 C published October 2018 until December 2019. Please note that several financial institutions featured in the report have published new coal policies in the past years, some of which have yet to be implemented, and the impacts on future capital flows into the focus utilities are assessed in detail in the report. 
  3. Financial institutions headquartered in Europe with new coal policies announced this year: Aegon, Lloyds, ABP, Pictet, Ilmarinen, The Royal Bank of Scotland, Crédit Mutuel, UBS, AG2R, Barclays, Union Investment, Deka Bank, HSBC, Ecofi, Allianz, BNP Paribas, Natixis, Rothschild & Co, Intesa Sanpaolo, SCOR, Groupe Macif, OFI Asset Management, Societe Generale.
  4. Europe’s eight most polluting coal companies: RWE, PGE, EPH, ČEZ, Enel/Endesa and Fortum/Uniper.

About: 

Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. Our groups are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner. www.beyond-coal.eu 

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