US Finance Sector Lagging on Coal Policies

Coal policy tool

The just-released Coal Policy Tool from Reclaim Finance, a French NGO, ranks (and grades) the coal policies of financial institutions world-wide.

The Coal Policy Tool’s comprehensive database of policy resources assesses the quality of existing policies as measured against the goal of keeping global warming below 1.5 degrees Celsius above pre-industrial levels. The Coal Policy Tool is a useful complement to the Global Coal Exit List, a unique resource that catalogs every company worldwide that has coal-related activities, throughout the whole thermal coal value chain.

The Coal Policy Tool shows that:

  • The best policies are in Europe, where one can find the highest number of financial institutions adopting policies on coal and reviewing them regularly to adopt higher standards.
  • US asset managers, which dominate the market worldwide, are among the worst performers. BlackRock is the only US asset manager with a policy on coal, but that policy affects less than a third of its investments. CalPERS and CalSTRS score the same as BlackRock: for all three, the analysis concludes, “Almost everything remains to be done.”
  • Except for French banks that have recently adopted policies to exit the coal sector, banks are globally lagging behind insurance companies, many of which have adopted appreciable restrictive exclusion criteria at the corporate level.

To date, 43 banks and insurers have ended financing for new thermal coal mines and plants. Natixis has gone above and beyond, also ending financial support to new coal infrastructure projects, such as new coal export-import terminals, and to retrofits extending coal plants’ lifespans. Only eight other financial institutions have taken these additional measures.

Quality is still a major issue. According to the Coal Policy Tool’s analysis, only 16 financial institutions,including top players such as AXA, Crédit Agricole/Amundi, Crédit Mutuel and UniCredit have a robust coal phase-out policy. Most coal policies around the world remain too weak to even prevent further growth of the coal sector.

“The tool goes beyond identifying and comparing policies and enabling clients, media, financial institutions, and other stakeholders to navigate the coal policy jungle easily. Above all, it aims to ensure high-quality coal policies that effectively contribute to preventing climate chaos,” says Lucie Pinson, Founder and Executive Director of Reclaim Finance.

Pinson adds:“It is not enough to adopt a policy, what we need are good coal policies. French financial institutions were the first global players that adopted policies on coal, but these policies had to be amended many times before they became sufficiently robust to support a coal exit. We cannot afford to continue delaying real action. Addressing oil and gas is increasingly pressing; financial institutions need to now urgently progress to the level of the highest quality coal policies identified by our tool.”

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