"A vanguard of financial institutions might be making demands for phase-outs of coal companies, but they are failing comprehensively, due to inadequate timelines and a lack of sanctions," according to a campaigner at Reclaim Finance.(Photo: Shutterstock)
Despite Climate Imperative, 94% of Analyzed Coal Companies Have No Phaseout Plan
Advocacy group calls on major banks and investors to pull the plug on a planet-wrecking industry that shows no urgency to curb its destruction.
With a new analysis in hand, an international climate advocacy group on Tuesday demanded that banks and investors worldwide use their leverage to force the coal industry to more rapidly end their planet-wrecking operations.
"Credible transition plans are all the rage, but our analysis reveals that the overwhelming majority of coal companies have no such thing."
The new report by Paris-based Reclaim Finance--entitled The Coal Companies Watchlist: How finance can accelerate the coal phaseout--makes the case that the financial industry must force polluters to develop and implement plans for a "rapid global phaseout of coal" that align with the Paris climate agreement's goal of limiting temperature rise by 2100 to 1.5degC above pre-industrial levels.
The watchlist follows a global coal reduction deal at the COP26 summit in Scotland last month. It also comes as the world endures extreme weather exacerbated by climbing temperatures and the financial sector faces rising scrutiny for contributing to the climate emergency.
Noting that at least 30 financial institutions around the world have called on mining and power companies to adopt roadmaps to phase out coal by 2021 or earlier, Reclaim Finance reviewed the exit plans of dozens of businesses facing such demands from their financiers.
As the group's executive director, Lucie Pinson, put it: "Credible transition plans are all the rage, but our analysis reveals that the overwhelming majority of coal companies have no such thing, with exit plans either nonexistent, or strewn with delays and loopholes."
"For the banks and investors backing them, the choice is clear: suspend services to companies failing to transition in line with the 1.5degC target or be complicit in climate chaos," she said.
The review revealed that 94% of the 47 analyzed companies have "no credible coal exit plan." According to the report:
- Only three out of 47 analyzed companies' plans (6%) meet all the basic criteria of a credible coal phaseout (no expansion, adequate timeline, and commitment to shut down assets);
- 28% of analyzed companies are still coal expansionists and have not even yet recognized the absolute necessity of stopping the development of new coal capacity;
- 55% of companies do not plan to retire their coal assets by 2030 and 2040, thereby failing to align with a 1.5degC pathway; and
- The remaining 11% of analyzed companies do provide an adequate phaseout calendar but fail to shut down their assets: by selling coal mines and plants or converting them to gas and biomass--two other unsustainable energy sources--the only thing these companies are greening is their public profile, with no material effect on climate change.
"Despite their dismal record in terms of coal phaseout plans, the companies analyzed here continue to benefit from a high level of support from financial institutions," the report notes. "In 2021, BNP Paribas, BPCE, Credit Agricole, Societe Generale and Unicredit--all the largest banks that have demanded coal phaseout plans--have provided over $9 billion of new financing to these coal companies."
The findings, Reclaim Finance argues, "illustrate the flaws associated with financial institutions' current approach to engaging coal companies" and the need for an immediate shift in strategy.
"This research unveils an unfortunate truth: As things stand, engagement practices are just not working," said Guillaume Pottier, stewardship campaigner at Reclaim Finance. "A vanguard of financial institutions might be making demands for phaseouts of coal companies, but they are failing comprehensively, due to inadequate timelines and a lack of sanctions."
"At best this approach is ill-conceived, at worst it represents straightforward greenwashing," Pottier said. "Engaging polluting companies is an important tactic, but only when demands are robust and backed up with the threat of divestment."
The report asserts that "with time fast running out to slash global emissions, it is imperative that all private financial institutions immediately adopt robust coal exit policies including the conditioning of their financial services on the adoption of Paris-aligned coal phaseout plans by specific deadlines."
"Financial institutions must also step-up their game in terms of engagement," the report adds, "and stop using vague demands for coal phaseout plans as an excuse not to exclude coal companies."
We are at a crossroads
This country and this world are at a monumental crossroads. In a few short weeks, US voters will have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
With a new analysis in hand, an international climate advocacy group on Tuesday demanded that banks and investors worldwide use their leverage to force the coal industry to more rapidly end their planet-wrecking operations.
"Credible transition plans are all the rage, but our analysis reveals that the overwhelming majority of coal companies have no such thing."
The new report by Paris-based Reclaim Finance--entitled The Coal Companies Watchlist: How finance can accelerate the coal phaseout--makes the case that the financial industry must force polluters to develop and implement plans for a "rapid global phaseout of coal" that align with the Paris climate agreement's goal of limiting temperature rise by 2100 to 1.5degC above pre-industrial levels.
The watchlist follows a global coal reduction deal at the COP26 summit in Scotland last month. It also comes as the world endures extreme weather exacerbated by climbing temperatures and the financial sector faces rising scrutiny for contributing to the climate emergency.
Noting that at least 30 financial institutions around the world have called on mining and power companies to adopt roadmaps to phase out coal by 2021 or earlier, Reclaim Finance reviewed the exit plans of dozens of businesses facing such demands from their financiers.
As the group's executive director, Lucie Pinson, put it: "Credible transition plans are all the rage, but our analysis reveals that the overwhelming majority of coal companies have no such thing, with exit plans either nonexistent, or strewn with delays and loopholes."
"For the banks and investors backing them, the choice is clear: suspend services to companies failing to transition in line with the 1.5degC target or be complicit in climate chaos," she said.
The review revealed that 94% of the 47 analyzed companies have "no credible coal exit plan." According to the report:
- Only three out of 47 analyzed companies' plans (6%) meet all the basic criteria of a credible coal phaseout (no expansion, adequate timeline, and commitment to shut down assets);
- 28% of analyzed companies are still coal expansionists and have not even yet recognized the absolute necessity of stopping the development of new coal capacity;
- 55% of companies do not plan to retire their coal assets by 2030 and 2040, thereby failing to align with a 1.5degC pathway; and
- The remaining 11% of analyzed companies do provide an adequate phaseout calendar but fail to shut down their assets: by selling coal mines and plants or converting them to gas and biomass--two other unsustainable energy sources--the only thing these companies are greening is their public profile, with no material effect on climate change.
"Despite their dismal record in terms of coal phaseout plans, the companies analyzed here continue to benefit from a high level of support from financial institutions," the report notes. "In 2021, BNP Paribas, BPCE, Credit Agricole, Societe Generale and Unicredit--all the largest banks that have demanded coal phaseout plans--have provided over $9 billion of new financing to these coal companies."
The findings, Reclaim Finance argues, "illustrate the flaws associated with financial institutions' current approach to engaging coal companies" and the need for an immediate shift in strategy.
"This research unveils an unfortunate truth: As things stand, engagement practices are just not working," said Guillaume Pottier, stewardship campaigner at Reclaim Finance. "A vanguard of financial institutions might be making demands for phaseouts of coal companies, but they are failing comprehensively, due to inadequate timelines and a lack of sanctions."
"At best this approach is ill-conceived, at worst it represents straightforward greenwashing," Pottier said. "Engaging polluting companies is an important tactic, but only when demands are robust and backed up with the threat of divestment."
The report asserts that "with time fast running out to slash global emissions, it is imperative that all private financial institutions immediately adopt robust coal exit policies including the conditioning of their financial services on the adoption of Paris-aligned coal phaseout plans by specific deadlines."
"Financial institutions must also step-up their game in terms of engagement," the report adds, "and stop using vague demands for coal phaseout plans as an excuse not to exclude coal companies."
With a new analysis in hand, an international climate advocacy group on Tuesday demanded that banks and investors worldwide use their leverage to force the coal industry to more rapidly end their planet-wrecking operations.
"Credible transition plans are all the rage, but our analysis reveals that the overwhelming majority of coal companies have no such thing."
The new report by Paris-based Reclaim Finance--entitled The Coal Companies Watchlist: How finance can accelerate the coal phaseout--makes the case that the financial industry must force polluters to develop and implement plans for a "rapid global phaseout of coal" that align with the Paris climate agreement's goal of limiting temperature rise by 2100 to 1.5degC above pre-industrial levels.
The watchlist follows a global coal reduction deal at the COP26 summit in Scotland last month. It also comes as the world endures extreme weather exacerbated by climbing temperatures and the financial sector faces rising scrutiny for contributing to the climate emergency.
Noting that at least 30 financial institutions around the world have called on mining and power companies to adopt roadmaps to phase out coal by 2021 or earlier, Reclaim Finance reviewed the exit plans of dozens of businesses facing such demands from their financiers.
As the group's executive director, Lucie Pinson, put it: "Credible transition plans are all the rage, but our analysis reveals that the overwhelming majority of coal companies have no such thing, with exit plans either nonexistent, or strewn with delays and loopholes."
"For the banks and investors backing them, the choice is clear: suspend services to companies failing to transition in line with the 1.5degC target or be complicit in climate chaos," she said.
The review revealed that 94% of the 47 analyzed companies have "no credible coal exit plan." According to the report:
- Only three out of 47 analyzed companies' plans (6%) meet all the basic criteria of a credible coal phaseout (no expansion, adequate timeline, and commitment to shut down assets);
- 28% of analyzed companies are still coal expansionists and have not even yet recognized the absolute necessity of stopping the development of new coal capacity;
- 55% of companies do not plan to retire their coal assets by 2030 and 2040, thereby failing to align with a 1.5degC pathway; and
- The remaining 11% of analyzed companies do provide an adequate phaseout calendar but fail to shut down their assets: by selling coal mines and plants or converting them to gas and biomass--two other unsustainable energy sources--the only thing these companies are greening is their public profile, with no material effect on climate change.
"Despite their dismal record in terms of coal phaseout plans, the companies analyzed here continue to benefit from a high level of support from financial institutions," the report notes. "In 2021, BNP Paribas, BPCE, Credit Agricole, Societe Generale and Unicredit--all the largest banks that have demanded coal phaseout plans--have provided over $9 billion of new financing to these coal companies."
The findings, Reclaim Finance argues, "illustrate the flaws associated with financial institutions' current approach to engaging coal companies" and the need for an immediate shift in strategy.
"This research unveils an unfortunate truth: As things stand, engagement practices are just not working," said Guillaume Pottier, stewardship campaigner at Reclaim Finance. "A vanguard of financial institutions might be making demands for phaseouts of coal companies, but they are failing comprehensively, due to inadequate timelines and a lack of sanctions."
"At best this approach is ill-conceived, at worst it represents straightforward greenwashing," Pottier said. "Engaging polluting companies is an important tactic, but only when demands are robust and backed up with the threat of divestment."
The report asserts that "with time fast running out to slash global emissions, it is imperative that all private financial institutions immediately adopt robust coal exit policies including the conditioning of their financial services on the adoption of Paris-aligned coal phaseout plans by specific deadlines."
"Financial institutions must also step-up their game in terms of engagement," the report adds, "and stop using vague demands for coal phaseout plans as an excuse not to exclude coal companies."