February, 24 2021, 11:00pm EDT
Groundbreaking Research Reveals Top Financiers of the Global Coal Industry
Commercial banks providing more money to the coal industry since the Paris AgreementJapanese banks are top lenders, while China, Japan and India account for 70% of underwriting to coal companiesUS investors hold 58% of institutional investments in the coal industry, with Japan in second place
Global
Today, Urgewald and a group of more than 25 civil society organizations, including Reclaim Finance, Rainforest Action Network, and 350.org, published groundbreaking research on the financiers and investors behind the global coal industry.
The Global Coal Exit List (GCEL) shows that, by January 2021, 4,478 institutional investors held investments totaling US$ 1.03 trillion in companies operating along the thermal coal value chain world wide. Among the investors covered by the research are pension funds, mutual funds, asset managers, insurance companies, commercial banks, sovereign wealth funds and other types of institutional investors.
"In past years, the scope of our financial research was limited to around 200 coal plant developers. Our new research, however, analyzes financial flows to all 934 companies on the Global Coal Exit List (GCEL). This is the first time anyone has attempted to analyze commercial banks' and institutional investors' exposure to the entire coal industry," says Katrin Ganswindt, head of financial research at Urgewald.
Top Institutional Investors in the Coal Industry
The world's largest institutional investor in the coal industry is the US mutual fund company Vanguard, with holdings of almost US$ 86 billion. It is closely followed by BlackRock, which holds investments of over US$ 84 billion. Together, these two investment giants account for 17% of institutional investments in the global coal industry.
Based on their size, BlackRock and Vanguard's coal investments are in a class of their own, but they are also representative of a much bigger problem. US investors are the single largest provider of institutional investment to companies on the Global Coal Exit List. With shares and bonds in value of US$ 604 billion, US investors collectively account for 59% of institutional investments in the global coal industry.
With holdings of US$ 81 billion, investors from Japan account for the second highest share of institutional investments in the coal industry. Japan's Government Pension Investment Fund alone holds bonds and shares in value of US$ 30 billion in companies listed on the GCEL. The third largest group are UK investors, whose collective holdings in the coal industry amount to US$ 47 billion.
"While the UK government recently announced that it will end public financing for overseas fossil fuel projects in 2021, most UK institutional investors have not even begun to expel coal from their portfolios. Unless they do their homework soon, the UK-hosted COP 26 will become a big embarrassment for these institutions," states Katrin Ganswindt.
The Biggest Lenders to the Coal Industry
Urgewald's research identified 380 commercial banks that provided loans totaling US$ 316 billion to the coal industry over the past 2 years. The top 3 lenders are the Japanese banks Mizuho (US$ 22 billion), Sumitomo Mitsui Banking Corporation(US$ 21 billion) and Mitsubishi UFJ Financial Group (US$ 18 billion). The 4th and 5th largest lenders to the coal industry are Citigroup (US$ 14 billion) and Barclays (US$ 13 billion).
"The coal policies adopted by Japanese banks are among the weakest in the world. They only cover a small portion of banks' lending and do not rule out corporate loans or underwriting for companies that are still building new coal plants in Japan, Vietnam, the Philippines and elsewhere. Japan's banks must stop pouring fuel on the fire and finally adopt comprehensive coal exclusion policies," says Eri Watanabe from 350.org Japan.
A regional breakdown of lenders from different countries shows that Japanese banks collectively provided US$ 75 billion in loans to the coal industry from October 2018 to October 2020. Commercial banks from Japanese banks alone accounted for 24% of total lending to companies on the Global Coal Exit List over the past two years. In total, Asian banks accounted for 39% of total lending.
The Biggest Underwriters of the Coal Industry
Over the same time period, 427 commercial banks channeled over US$ 810 billionto companies on the Global Coal Exit List through underwriting. The world's top 5 underwriters are all Chinese financial institutions.
ICBC (Industrial and Commercial Bank of China), the world's biggest bank, is the top underwriter, with almost US$ 37 million, and also figures in the top 30 list of lenders, with US$ 3 million. ICBC's record on coal financing is one of the worst among the largest banks in the world, and they are involved in controversial coal projects all over the globe, such as the Sengwa power station in Zimbabwe, Hunutlu power station in Turkey, Bengkulu Coal Power in Indonesia and many more.
"Facing the prospect of a global recession, investment in coal power infrastructure will become even riskier for borrowing countries and lenders. While the world is embracing the benefits of clean and affordable renewable energy, coal projects supported will lock recipient countries into dirty, dangerous and expensive fossil fuel infrastructure that is outdated. Instead, renewable energy investments can be a major force in economic recovery, generating decent returns on investment while boosting employment opportunities. It's time for ICBC to correctly assess the risks implicated in their investments and stop financing coal projects," says Yossi Cadan, Global Finance Campaign Manager at 350.org.
While Chinese banks account for less than 6% of total lending to the coal industry, they account for 58% of underwriting. Through their underwriting, Chinese banks channeled US$ 467 billion to the coal industry over the past two years. Next in line are US banks (US$ 105 billion), Japanese banks (US$ 59 billion), Indian banks (US$ 36 billion) and UK banks (US$ 35 billion). Together, banks from these 5 countries account for 87% of total underwriting for the coal industry, with China, Japan and India accounting for 70%.
Commercial Banks' Support for the Coal Industry has Increased since Paris
The research also examined the development of banks' lending and underwriting for the coal industry since January 2016. While direct lending for coal companies spiked in 2017, subsequent years show a downward trend in lending volumes. Underwriting of coal industry shares and bonds, however, has grown steadily since 2016. The alarming result of this analysis is that commercial banks are channeling more money to the coal industry than in 2016, the year after the Paris Climate Agreement was signed.
In 2016, banks provided US$ 491 billion through lending and underwriting to companies listed on the GCEL. By 2019, this amount had grown to US$ 543 billion, an increase of over 11%.
What needs to be done?
Ending the era of coal means ending the era of coal finance and investment. But the time to accomplish this task is quickly running out.
"While coal demand is falling in the United States and Europe, coal use is growing in Asia. Japan and China have both set lofty net-zero goals and they must meet them through a managed and determined phase out of fossil fuels. Banks in Japan and China must support their countries' climate goals by withdrawing coal investments not just within their country but also abroad as that is where the vast majority of their investments are directed. This is the only way to prevent an unmitigated climate disaster that will affect communities in Asia and globally. I write this as another typhoon bears down on the Philippines, where I live. The climate disaster is now, it is not in the net-zero future," says Chuck Baclagon, 350 Asia Finance Campaigner.
"What we need are comprehensive, immediate coal exit policies. Insurers such as AXA, banks like Credit Mutuel, UniCredit and Desjardins or asset managers like Ostrum have already shown what must be done by excluding most of the companies on the Global Coal Exit List from their portfolios. Now is the time for the finance industry to act. A speedy exit from coal finance and investment is not only do-able and desirable, it is a question of survival," says Yann Louvel, policy analyst for the NGO Reclaim Finance.
350 is building a future that's just, prosperous, equitable and safe from the effects of the climate crisis. We're an international movement of ordinary people working to end the age of fossil fuels and build a world of community-led renewable energy for all.
LATEST NEWS
Joe Lieberman, Iraq War Cheerleader and Killer of Public Option, Dead at 82
"Joe Lieberman's legacy will live on as your medical debt."
Mar 27, 2024
While current and former officials across the U.S. political spectrum shared praise for and fond memories of former Sen. Joe Lieberman in response to news of his death on Wednesday, critics highlighted how some of his key positions led to the deaths of many others.
Lieberman's family said the 82-year-old died at NewYork-Presbyterian Hospital after a fall at his home in the Bronx. He served in the Connecticut Senate, as the state's attorney general, and in the U.S. Senate—initially as a Democrat and eventually as an Independent. He was also Democratic former Vice President Al Gore's running mate in the 2000 presidential election.
"Up until the very end, Joe Lieberman enjoyed the high-quality, government-financed healthcare that he worked diligently to deny the rest of us. That's his legacy," said Melanie D'Arrigo, executive director of the Campaign for New York Health, which advocates for universal, single-payer healthcare.
As Warren Gunnels, majority staff director for Senate Health, Education, Labor, and Pensions Committee Chair Bernie Sanders (I-Vt.),
explained, "Joe Lieberman led the effort to ensure the Affordable Care Act did not include a public option or a reduction in the Medicare eligibility age to 55."
Noting that Lieberman also lied about the presence of weapons of mass destruction (WMDs) in Iraq—which was used to justify the 2003 U.S. invasion—Gunnels asked, "How many people unnecessarily died as a result?"
He was far from alone in highlighting the two defining positions.
The Lever's David Sirota declared, "RIP Joe Lieberman, Iraq War cheerleader who led the fight to make sure Medicare was not extended to millions of Americans who desperately needed the kind of healthcare coverage he enjoyed in the Senate."
The Debt Collective said on social media that "Joe Lieberman killed so many people when he killed the public option. Not to mention all the people he killed by cheerleading every war and every lie that led to war. A truly horrible person with a shameful legacy."
Journalist Jon Schwarz pointed out that Lieberman continued to lie about the WMDs long after the claims were debunked.
FormerMSNBC host Mehdi Hasan noted that Lieberman declined an opportunity to apologize for the disastrous war, sharing a clip from his on-camera interview with the ex-senator in 2021.
And please don\u2019t give me this \u2018don\u2019t speak ill of the dead\u2019 stuff - 1) I\u2019m not speaking ill, I\u2019m stating facts, and 2) public figures are public figures, and their obits reflect their legacies and so we should be honest in our accounts of their legacies. Not offensive but honest— (@)
"We lost a giant today. I often disagreed with Joe Lieberman but he was always honorable in the way he called for American troops to murder people abroad so he could get his jollies," said Matt Stoller of the American Economic Liberties Project in a series of sarcastic social media posts.
"Joe Lieberman balanced his love of other people fighting in immoral wars with a commitment to preventing Americans from getting healthcare," Stoller added. "Even after his Senate career, he showed his strong democratic values by lobbying for Chinese telecom firms. We will miss this man."
Keep ReadingShow Less
'Enough Is Enough': Ireland Joins ICJ Genocide Case Against Israel
"What we saw on October 7 in Israel, and what we are seeing in Gaza now, represents the blatant violation of international humanitarian law on a mass scale," said one top Irish official.
Mar 27, 2024
Citing Israel's "blatant" human rights violations in Gaza, Ireland's second-highest-ranking official said Wednesday that the country will join the South Africa-led genocide case before the International Court of Justice in The Hague.
Irish Tánaiste Micheál Martin—the equivalent of a deputy prime minister in other parliamentary nations—said that Ireland decided to intervene in the case after analyzing the "legal and policy issues" pertaining to the case under review by the United Nations' top court.
"It is for the court to determine whether genocide is being committed," Martin—who also serves as Ireland's foreign and defense minister—said in a statement. "But I want to be clear in reiterating what I have said many times in the last few months; what we saw on October 7 in Israel, and what we are seeing in Gaza now, represents the blatant violation of international humanitarian law on a mass scale."
Martin continued:
The taking of hostages. The purposeful withholding of humanitarian assistance to civilians. The targeting of civilians and of civilian infrastructure. The indiscriminate use of explosive weapons in populated areas. The use of civilian objects for military purposes. The collective punishment of an entire population.
The list goes on. It has to stop. The view of the international community is clear. Enough is enough. The U.N. Security Council has demanded an immediate cease-fire, the unconditional release of hostages, and the lifting of all barriers to the provision of humanitarian assistance at scale. The European Council has echoed this call.
South Africa's case—which is supported by over 30 countries, the Arab League, African Union, and others—incisively details Israel's conduct in the war, including the killing of tens of thousands of Palestinians, mostly women and children; the wounding of tens of thousands more; the forcible displacement of 90% of the besieged enclave's 2.3 million people; and the inflicting of conditions leading to widespread starvation and disease. The filing also cited numerous genocidal statements by Israeli officials.
On January 26, the ICJ issued a preliminary ruling that Israel is plausibly committing genocide in Gaza and ordered its government and military to prevent genocidal acts. Palestinian and international human rights defenders say Israel has ignored the order.
A draft report
released this week by the U.N.'s Human Rights Council found "reasonable grounds to believe" that Israel is committing genocide in Gaza, a move that came on the same day as the U.N. Security Council passed a resolution demanding an immediate cease-fire in the ongoing war.
"The situation could not be more stark; half the population of Gaza face imminent famine and 100% of the population face acute food insecurity," said Martin. "As the U.N. secretary-general said as he inspected long lines of blocked relief trucks waiting to enter Gaza during his visit to Rafah at the weekend: 'It is time to truly flood Gaza with lifesaving aid. The choice is clear: surge or starvation.' I echo his words today."
In a St. Partick's Day White House meeting with U.S. President Joe Biden—a staunch supporter of Israel—Irish Toaiseach (Prime Minister) Leo Varadkar, who announced earlier this month that he would soon step down, said that "the Irish people are deeply troubled about the catastrophe that's unfolding before our eyes in Gaza."
"And when I travel the world, leaders often ask me why the Irish have such empathy for the Palestinian people," he added. "And the answer is simple: We see our history in their eyes—a story of displacement, of dispossession and national identity questioned and denied, forced emigration, discrimination, and now hunger."
Keep ReadingShow Less
House Democrat Calls GOP Budget a 'Blueprint for a Dystopian Hellscape'
Rep. Don Beyer warns the plan "would see unbridled benefits flowing to a wealthy and well-connected few while tens of millions of Americans lose healthcare, housing, retirement security, and food security."
Mar 27, 2024
As Republicans on Wednesday set their sights on a key seat opening up in the U.S. House of Representatives, the chamber's senior Democrat on the congressional Joint Economic Committee put out a blistering takedown of a top GOP budget proposal for the next fiscal year.
Congressman Don Beyer (D-Va.) took aim at the 180-page "Fiscal Sanity to Save America" plan released last week by the Republican Study Committee (RSC)—which includes about 80% of GOP House members—following proposals from Democratic President Joe Biden and House Budget Committee Chair Jodey Arrington (R-Texas).
"The Republican Study Committee budget is a blueprint for a dystopian hellscape," he warned. "The vision offered by this group, which counts 4 in 5 House Republicans as members, would see unbridled benefits flowing to a wealthy and well-connected few while tens of millions of Americans lose healthcare, housing, retirement security, and food security."
RSC proposals to "dramatically weaken healthcare," Beyer noted, include turning Medicare into a voucher plan and rolling back Inflation Reduction Act (IRA) provisions that cut costs for seniors; repealing tax subsidies for the Affordable Care Act and the law's protections for people with preexisting conditions; and transforming Medicaid and the Children's Health Insurance Program into block grants to states.
As Common Dreams has reported, in addition to seeking cuts to Medicare and Social Security—while claiming to do nothing of the sort—the RSC has also launched a full-fledged assault on reproductive healthcare and rights, promoting 42 bills that would ban abortions after 15 weeks or even earlier, require unnecessary ultrasounds and 24-hour waiting periods, prohibit the use of fetal stem cells for research, and threaten access to in vitro fertilization, among other restrictions.
In addition to attacking reproductive freedom and key programs for seniors and low-income families, Beyer highlighted, the RSC wants to "weaken public health, public safety, and environmental protections," while "cutting taxes for the wealthy, by a lot."
The RSC advocates ending green tax credits from the IRA and Infrastructure Investment and Jobs Act as well as slashing money for Community Oriented Policing Services and the Bipartisan Safer Communities Act. The committee also calls for permanently lowering taxes for the ultrarich, indexing capital gains taxes to inflation, repealing the estate tax, rolling back the IRA's corporate alternative minimum tax, and eliminating funding intended to help the Internal Revenue Service catch wealthy tax cheats.
"Democrats believe there is a better way to get our fiscal house in order without betraying our values," said Beyer. "That starts with making smart investments in our people and our future while demanding that the rich and large corporations pay their fair share in taxes. The contrast between the Democratic approach and this Republican budget could not possibly be clearer."
Biden's budget blueprint—released as he prepares for an electoral rematch against former Republican President Donald Trump, who infamously cut taxes for rich people and corporations—proposes a 25% minimum tax for individuals with wealth of more than $100 million, along with ending capital income tax breaks and closing other loopholes.
Polling results released Tuesday by Morning Consult show that a majority of voters across party lines in key swing states support raising taxes on people who make more than $400,000 per year.
Biden and the divided Congress this past weekend narrowly avoided a government shutdown by passing a long-delayed spending package. Fiscal year 2025 is set to begin in October, setting up another election-year fight over funding.
In what's been
dubbed the "Great Resignation," a growing number of House Republicans have announced that they are not seeking reelection or even exited their seats early—shrinking the party's already slim majority in the lower chamber.
Keep ReadingShow Less
Most Popular