Worldwide, more than 100 large banks and insurance companies have limited the financing of transactions with coal or stopped, according to a new report. However, there are large regional differences.
16 of the 40 world’s largest banks and at least 20 global companies among the 100 companies that have reduced their carbon financing or terminated. Together, they manage assets of 5400 billion euros, equivalent to around 20 per cent of the assets of the global coal industry.
These Figures come from a new report by the British Institute for energy Economics and financial analysis (IEEFA). Compared to the previous year, 34 new or significantly stricter restrictions for the financing of carbon transactions had been added, the report said.
Coal is almost half of the worldwide CO2 emissions caused by energy production.
“Since 2013, every month has informed a minimum of a globally significant Bank, or insurance, from the carbon Finance to withdraw,” said the IEEFA.
Demolition of the cooling towers of a coal-fired power plant in Zaozhuang in the Chinese province of Shandong in September 2018
Development of Bank’s prior direction
The world Bank, 2013 was the first Institution, the announced restrictions on coal Finance. The 100. The Declaration came ten years later, as the European Bank for reconstruction and development (EBRD) expanded in December 2018, your ban on coal financing to three more countries.
Since the beginning of 2019, the list of IEEFA has become even longer: Nedbank from South Africa, Barclays Bank UK, Export Development Canada, and Varma of Finland have announced since then, also, the financing of carbon transactions, to limit or cease. The youngest member of the Vienna Insurance Group of Austria, announced last week, to assure new coal-fired power plants and mines.
A total of eight insurers have ceased their activities in the case of coal stores or at least limited, including industry giants such as Allianz, Axa, Munich Re and Swiss Re.
Poison for investors
The Swedish pension Fund AP7 has deleted in the past year, 65 companies from its Portfolio, the climate-sceptic lobby groups had supported.
“For global investors, the coal-fired power generation is a poison increasingly – for the sake of the environment, the Reputation and the finances,” said Tim Buckley, who is in charge of the studies on energy Finance at IEEFA.
“Banks and insurance companies exacerbate existing rules and restrict new lending,” says Buckley. “So a Domino effect is created in the global financial industry, the shutting of the coal industry is increasingly in the air.” Investors had, in the meantime a clear preference for effective, sustainable and indigenous renewable energy sources.
Solar cells in Bangladesh – a long-term replacement for coal-fired power?
Conflicting signals from Asia
According to Buckely, the new report from the IEEFA also shows that the phase-out of coal financing is now popular worldwide. To America and Europe, the wave has now reached Asia. In Japan, the life insurer Dai-ichi Life and Sumitomo Mitsui Trust Bank, limited coal financing in 2018.
In China, investment in solar energy surpass in the meantime, the coal-fired power in India flows a lot of money in renewable energy. And two South Korean pension Fund, announced last October, the complete withdrawal from investments in coal.
From China there is, however, no evidence that the local financial institutions pull out of coal financing, the report of the IEEFA.
Also, there is the risk of “Greenwashing,” says Tim Buckley, so that companies can Act “green” to appear, your business policy, but does not fundamentally change.
Buckley also criticised the US firms Blackrock, Vanguard and Goldman Sachs, which were the withdrawal from carbon financing are far less active than their competitors.
Different Speeds
The different attitudes show themselves not only in companies but also in national governments.
So the UK, France, Canada and new Zealand want to adopt at the latest in 2030 from the electricity generation through coal. In Germany, the exit should be made according to the coal Commission until 2038.
In contrast, the United States, Australia, China and Poland are finding it difficult to set a deadline for the exit.