Commercial banks have reportedly invested some $1.5 trillion in the coal industry since 2019. The study released by campaign groups Urgewald and Reclaim Finance on Tuesday says financial giants from the US, China, Japan, India, Canada and the UK play a major role in keeping the coal industry afloat, while policymakers and business leaders persistently call for energy transition.
The research says big investors from the listed nations are responsible for more than 80% of coal financing and investment.
“These financial institutions must come under fire from all quarters: civil society organizations, financial regulators, customers and progressive investors,” Katrin Ganswindt, head of financial research at Urgewald, said in the report seen by CNBC. “Unless we end financing of coal, it will end us.”
The research outlines all corporate lending and underwriting for companies on Urgewald’s Global Coal Exit List (GCEL) but excludes green bonds and financing that is directed toward non-coal activities. It refers to a list of 1,032 corporations accounting for 90% of the world’s thermal coal production and coal-fired capacity.
“Banks like to argue that they want to help their coal clients transition, but the reality is that almost none of these companies are transitioning. And they have little incentive to do so as long as bankers continue writing them blank checks,” Ganswindt said.
The findings show that 484 commercial banks channeled $1.2 trillion to companies on the GCEL through underwriting from January 2019 through to November last year with just 12 of them accounting for 39% of the total underwriting since 2019. Another 376 lenders provided $363 billion to the coal industry.
Meanwhile, 10 of these so-called “dirty dozen” lenders are members of the UN’s Net Zero Banking Alliance – an industry-led initiative focused on aligning their portfolios with net-zero emissions by 2050.
Japan’s Mizuho Financial, Mitsubishi UFJ Financial and SMBC Group are reportedly the top three lenders providing loans to the coal sector. They are followed by the UK’s Barclays and Wall Street’s Citigroup.
The research also finds nearly 5,000 institutional investors with combined holdings of over $1.2 trillion in the coal industry with the top 25 investors accounting for 46% of the total. US asset managers Blackrock and Vanguard are reportedly the largest institutional investors in coal.
For more stories on economy & finance visit RT's business section