British banks’ monetary help for firms concerned within the coal business has risen for the reason that 2015 Paris settlement, regardless of their pledges to wind down financing for a sector seen as a major impediment to tackling world heating.
UK lenders supplied loans and underwriting companies value $30.3bn (£21.9bn) to firms that bought or burned coal, or supplied coal business companies, throughout 2019, the newest yr for which full information is out there, based on analysis by the marketing campaign teams Reclaim Finance and Urgewald. That represented a major enhance in contrast with $21.5bn in financing supplied in 2016.
Barclays was by far the most important UK supplier of finance to firms within the coal business, adopted by HSBC and Commonplace Chartered, the analysis discovered.
Burning coal produces extra carbon dioxide emissions than different fossil fuels, together with oil and pure gasoline, and phasing it out quickly is extensively seen as a key a part of ending the local weather disaster.
Nevertheless, campaigners have criticised the banks and different monetary corporations comparable to insurers and asset managers whose phase-out plans enable them to proceed making the most of coal for years.
The UK is the world’s third-largest lender to coal business firms, behind solely the US and Japan. The discovering comes because the UK prepares to host UN Cop26 local weather talks in November. Beneath the Paris local weather accord, 189 international locations agreed to restrict world heating to properly beneath 2C, the scientifically suggested restrict of security.
Lucie Pinson, Reclaim Finance’s government director, stated: “The Metropolis of London isn’t lifting a finger to finish its lethal coal dependancy, even when meaning wrecking the UK’s status on local weather. On the worldwide stage the UK authorities has sought to steer a worldwide exit from coal, however the monetary sector clearly hasn’t received the memo.”
Barclays supplied loans and underwriting (the acquisition and resale of debt or shares for firms elevating cash) value $17.5bn in 2019 for firms on the worldwide coal exit record, a database of firms with important coal-related earnings. This included finance for the FTSE 100 mining firm Glencore and the Finnish and US vitality firms Fortum and Duke Vitality, the report says.
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HSBC gave $6.5bn in financing in 2019 to firms with coal pursuits. It has beforehand financed firms together with Indonesia’s PLN and South Korea’s Kepco. Commonplace Chartered supplied companies value $4.6bn in 2019, and has funded India’s Adani and Energy Finance Corp, in addition to South Korea’s Posco.
Between January and October 2020 these three banks supplied one other $19.2bn in coal financing – the identical quantity as in the entire of 2016.
The info comes as traders more and more stress banks to enhance their file on local weather points. On Wednesday Barclays will face its second consecutive shareholder local weather vote on a decision urging it to part out companies to coal, oil and gasoline firms.
Market Forces, the environmental group that organised the shareholder decision, claims the financial institution nonetheless has not proved that its work with polluting corporations is aligned with Paris local weather targets.
Barclays says it adopted its local weather coverage final yr, claiming it may attain internet zero emissions targets with out universally phasing out fossil gasoline purchasers, and as an alternative serving to them transition to greener enterprise fashions.
A gaggle of 16 influential funding corporations – together with Amundi, Man Group and government-backed pension scheme Nest – wrote to the Barclays chief government, Jes Staley, final week, pushing him to tighten its insurance policies. Nevertheless, it’s understood that a number of the traders are possible to provide Barclays extra time to implement present pledges earlier than making use of additional stress.
Barclays stated: “The board continues to consider that Barclays could make the best distinction by supporting the transition to a low carbon financial system, somewhat than by merely phasing out help for a number of the purchasers who’re most engaged in it.”
The financial institution stated the vast majority of the coal financing coated by the analysis occurred earlier than it began aligning its work with the Paris settlement in March 2020. It should step by step restrict financing to firms that receive important coal revenues.
Barclays, HSBC and Commonplace Chartered stated they didn’t present direct financing to new coal tasks, though that didn’t take note of financing for conglomerates with extra numerous companies.
HSBC stated it might publish a plan by the top of the yr to part out financing for coal-fired energy tasks or thermal coalmines in wealthier international locations by 2030. A spokesperson for HSBC stated the financial institution would assist purchasers “progressively decarbonise” however that it might additionally intention to “preserve financial stability”.
A Commonplace Chartered spokesperson stated the corporate had “made main strides in our coal coverage over the previous few years” and it might proceed to evaluation its place.
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