Monday, October 5, 2015
Contact: Blair FitzGibbon, 202-503-6141
Citigroup Announces Financing Cuts for Global Coal Industry;
Becomes Second Major Bank to do so After Bank of America
Rainforest Action Network Pushes for New Global Banking Trend, Urges Halt to All Coal Financing
New York – Citigroup today released a new policy to cut its lending to the global coal mining industry. The bank updated its environmental policy framework, stating that it had begun to cut its credit exposure to coal mining and that “going forward, we commit to continue this trend of reducing our global credit exposure to coal mining companies.”
This is the second major bank to cut financing for coal mining this year after Bank of America announced a similar policy in May, following years of campaigning by Rainforest Action Network (RAN) and allied groups. Europe’s third largest bank Crédit Agricole also adopted a similar commitment earlier this year, under pressure from European organizations. Citigroup’s move follows the launch of the Paris Pledge this summer, a global coalition of over 130 organizations calling on the banking sector to end its support for coal mining and coal-fired power prior to the Paris Climate Conference this year.
“We are encouraged to see Citigroup begin to move away from lending to coal mining,” said Lindsey Allen, Executive Director of RAN. “But reducing credit exposure is only a partial step forward. We urge Citigroup and Wall Street laggards such as Morgan Stanley to cut all financing ties to both coal mining and coal-fired power.”
Last month, RAN launched a new campaign calling on Morgan Stanley to end its financing for coal. And this Friday, activists will hold a nationwide day of action to spotlight the bank’s continued financing ties to some of the world’s most carbon-intensive and socially destructive coal mining and power companies. Morgan Stanley is the latest target in a series of campaigns by RAN since 2000 to hold major U.S. banks accountable for the environmental, human rights, and climate impacts of their financing decisions.
“With Bank of America, Crédit Agricole, and now Citigroup withdrawing support for coal mining, this announcement shows major momentum away from financing coal by the banking sector,” said Allen.
The Bank of America announcement in May followed four years of campaigning by RAN and other groups. This time, Citigroup moved swiftly to avoid a campaign ahead of December’s climate negotiations in Paris. Financing policy changes at both banks acknowledged that the scale of the challenge posed by climate change calls for the financial sector to transition away from financing high-carbon energy sources in addition to scaling up financing for low-carbon energy.
Earlier today, Citigroup, the parent company of Citibank, committed to take a significant, though partial step away from banking coal. The company updated its environmental policy statement, stating that it had begun to cut its credit exposure to coal mining and that “going forward, we commit to continue this trend of reducing our global credit exposure to coal mining companies.” This policy change makes Citigroup the third global bank to commit to broad industry-wide cuts to coal mining finance this year, and the first to do so since the launch of the global Paris Pledge calling on banks to end financing for coal mining and coal-fired power.
Overall, the policy change is a positive one, signaling that Citigroup is moving away from lending to an industry that is incompatible with a low-carbon future and a major contributor to climate change. However, Citigroup’s policy change leaves some major loopholes and unanswered questions:
- It is incomplete, covering only part of Citigroup’s banking relationships with coal mining companies – This commitment to reduce its “credit exposure” commits Citigroup to reduce corporate lending to coal companies, but not the bank’s continued involvement with the industry through issuing bonds and shares. This leaves a big loophole for the bank to continue to underwrite new debt and equity for coal mining companies.
- It lacks a clear timeline and phase-out commitment – Although the bank states that it has already begun to reduce its exposure to coal mining, reducing exposure is not the same as ending it. RAN will be monitoring the bank’s participation in transactions with coal mining companies closely to assess how this commitment is moving the bank towards phasing out its lending involvement with coal mining altogether.
- It does not address the bank’s financing relationships with coal-fired power – Last year, Citigroup financed $2.5 billion for the largest operators of coal power plants in the world. The bank’s policy change is silent on these transactions, a key gap, especially after Crédit Agricole announced significant cuts to coal power financing last week.
With less than two months before the Paris climate conference, we’re long past the time for incremental steps away from coal. It’s time for banks to stop financing it, period. As Anote Tong, President of the low-lying island nation of Kiribati wrote in August, the development of new coal mines “undermines the spirit and intent of any agreement we may reach…To avoid catastrophic climate change, we must leave the vast bulk of carbon reserves in the ground.”
Bottom line, time is running out for Citigroup’s competitors on Wall Street, including Morgan Stanley, to get on the right side of history on climate and coal by cutting ties to coal mining and coal-fired power.
Last week, we launched our campaign to pressure Morgan Stanley to stop cashing in on coal.1 Thanks to your action, we have their attention. Now it’s time to up the ante. Next Friday, October 9, we’ll be rallying at a Morgan Stanley branch near you.
Will you join us?
What: Rally at Morgan Stanley!
When: Friday, October 9
Where: A Morgan Stanley branch near you
We know pressure works: Just this year, you successfully pushed Bank of America to drop coal mining after a four-year RAN campaign.2 Here at RAN, we’ve been working behind the scenes to push Wall Street banks to meet or exceed Bank of America’s policy, and we’ve seen positive signs. But Morgan Stanley continues to finance coal’s worst of the worst.
Conducted half a billion dollars worth of coal deals in 2014 — and also banks Peabody Energy, the world’s largest private sector coal mining company.
Financed $1.2 billion for the largest coal fired power plant operators in the world last year — including RWE, Europe’s largest single emitter of carbon dioxide.
Continues to finance mountaintop removal coal mining, at a time when eleven of Morgan Stanley’s competitors have committed to cut financing for this horrific practice.
Coal hurts communities and kills the climate. Rally next Friday: Tell Morgan Stanley to drop it!
For fifteen years, RAN and activists like you have been holding the U.S. banking sector accountable for its environmental and human rights impacts. Together, we’ll make Morgan Stanley the next bank to commit to dropping coal.
1. "Five Reasons Why Morgan Stanley is RAN's Next Target Bank on Coal Finance," Rainforest Action Network, September 22, 2015
2. Rainforest Action Network, "Bank of America Campaign Timeline", May 6, 2015
We’re three months away from the crucial Paris climate conference, and some major U.S. banks have been taking the lead and committing to get out of coal.1 Here at Rainforest Action Network, we’ve been working behind the scenes to push Wall Street banks to drop coal across the board. We’ve seen positive signs from a number of banks. But in the meantime, we’ve also seen Morgan Stanley continue to finance coal’s worst of the worst.
Morgan Stanley has been banking the global coal industry’s worst corporations for years—and they refuse to face the realities of climate change. Morgan Stanley:
Conducted half a billion dollars worth of coal deals in 2014.2
Has a long-standing relationship with Peabody Energy, the world’s largest private sector coal mining company, which produced a quarter billion tons of coal last year.3
Financed $1.2 billion for the largest coal fired power plant operators in the world last year—including RWE, Europe’s largest single emitter of carbon dioxide.4
Continues to finance the horrific practice of mountaintop removal (MTR) coal mining—literally blowing off the tops of mountains to get at the coal inside, destroying ecosystems, and poisoning communities in beautiful rural Appalachia. Meanwhile, eleven of Morgan Stanley’s competitors have committed to cut financing for MTR.
For fifteen years, RAN and activists like you have been holding the U.S. banking sector accountable for its environmental and human rights impacts. Most recently, you successfully pushed Bank of America to drop coal mining after a four-year RAN campaign.5 Earlier this year, Crédit Agricole, the third-biggest bank in Europe, also adopted a major new coal policy. It’s past time for Morgan Stanley and the rest of Wall Street to meet and exceed these pledges by dropping financing for coal mining and coal power.
In the run-up to December’s vital climate conference in Paris, RAN has joined with more than 130 climate organizations worldwide to call on the global banking sector to end financing for coal mining and coal-fired power.6 We’re seeing a broad call for a comprehensive transition away from fossil fuels, from everyone from communities on the frontlines of climate change to the world’s elected officials. This is a make-or-break moment for the global banking sector to do its part in moving us toward a post-carbon economy. With the Paris climate conference less than three months away, it’s time for U.S. banks to drop coal once and for all.
1. "Bank of America Backs Away from Funding Coal Mining," Huffington Post, May 6, 2015
2. Rainforest Action Network, 2015 Coal Finance Report Card, p. 34
3. "Peabody Energy Announces Results For The Year Ended December 31, 2014”, Jan. 27, 2015
4. Rainforest Action Network, 2015 Coal Finance Report Card, p. 40
5. Rainforest Action Network, "Bank of America Campaign Timeline", May 6, 2015
6. Paris Pledge, http://dotheparispledge.org/
Embargoed for: September 22, 2015
Contact: Blair FitzGibbon, 202-503-6141
Morgan Stanley Pressured to Drop Coal Financing
Rainforest Action Network Announces Campaign as Next Major Bank Targeted Since Bank of America Coal Milestone
San Francisco – Today, Rainforest Action Network (RAN) announced that Morgan Stanley is the next major investment bank being targeted with a public campaign to demand that the bank commit to stop financing coal mining and coal-fired power.
“Morgan Stanley has longstanding financing relationships with some of the worst offenders from the global coal mining industry, including Peabody Energy, the world’s largest private sector coal mining company,” said Ben Collins, Senior Research and Policy Campaigner at RAN. “Last year alone, the bank financed $477 million for coal mining.”
Morgan Stanley continues to finance top producers of mountaintop removal coal, even as eleven of its competitors have committed to cut financing for the practice. The bank also financed $1.2 billion in 2014 for the largest operators of coal-fired power plants in the world such as RWE, Europe’s largest single emitter of carbon dioxide.
For fifteen years, RAN has been holding the U.S. banking sector accountable for its environmental and human rights impacts, most recently campaigning against Bank of America’s coal financing. Earlier this year, Bank of America and Credit Agricole both adopted new policies that took major steps away from financing coal. Now RAN is demanding Morgan Stanley and the rest of Wall Street meet and exceed these commitments by adopting comprehensive policies to end financing for coal mining and coal fired power.
In the lead up to the Paris climate conference in November, RAN has joined with over 120 other civil society groups partnered in the Paris Pledge that calls on the global banking sector to end financing for coal mining and coal-fired power. Global political and civil society leaders have called for a rapid transition away from fossil fuels. This year is becoming the make or break moment for global banks to decide how they will choose to invest in the future of energy.
Today, RAN announced our next bank target on coal financing: Morgan Stanley. With Bank of America and Credit Agricole already taking major steps away from financing coal and the Paris Climate Conference less than three months away, Wall Street banks are in a race against time to be on the right side of history on climate by dropping coal. Here are five key reasons why we’re targeting Morgan Stanley:
Morgan Stanley continues to finance some of the worst of the U.S. coal industry - The bank maintains an eyebrow-raising roster of U.S. coal company clients. Its recent loans and bonds have flowed to operators of mountaintop removal coal mines such as Alpha Natural Resources that continue to blast off the tops of mountains and force communities in Appalachia to live with dangerous air and water pollution. And among operators of coal-fired power plants, Morgan Stanley’s clients include FirstEnergy, which is currently begging regulators to force customers to bail out its fleet of unprofitable coal plants.
The bank’s finances the biggest corporate players in coal around the world - Earlier this year, Morgan Stanley helped Peabody Energy refinance a billion dollars worth of debt through the bond markets. Peabody is the world’s largest private sector coal mining company and produced 250 million tons of coal last year. The bank also finances Europe’s largest single emitter of carbon dioxide, the mining and power giant RWE. Last month, over a thousand activists occupied an RWE open-pit coal mine, halting coal production and spotlighting RWE as an example of a company that is incompatible with a low-carbon future.
Even as other banks have taken steps away from financing for coal, Morgan Stanley is moving in the wrong direction - Eleven of the bank’s peer institutions in the U.S. and Europe have committed to cut financing for money-losing mountaintop removal coal mining, but Morgan Stanley continues to throw financial lifelines to mountaintop removal producers such as Alpha Natural Resources, leading a bond transaction for the soon-to-be-bankrupt company last year.
The bank also finances coal companies that violate human rights - It’s inexcusable that nearly five years after the UN Human Rights Council published its Guiding Principles on Business and Human Rights, Morgan Stanley’s financing policy documents have major gaps on human rights. This year, the bank earned a human rights score just above failing in the 2015 Coal Finance Report Card based on its coal financing policies and practices. Morgan Stanley’s coal industry clients include Glencore, joint owner of the Cerrejon coal mine in Colombia, which has been involved with serious human rights violations against communities near the mine.
Morgan Stanley has a hypocrisy problem on climate change - Even with its coal industry ties, the bank has not been shy in promoting itself as a sustainability leader. As bank executive Tom Nides said while promoting Morgan Stanley’s new Institute for Sustainable Investing, “Morgan Stanley is about being a market leader in sustainable investing, and that’s what we intend to do.” It’s time for the bank to start walking its talk on sustainability by cutting ties to the coal industry.
Help us tell Morgan Stanley to that with the Paris Climate Conference rapidly approaching, it’s past time to stop financing coal.
In the next week, Coal India, the world’s biggest coal company, is trying to cash in with a big share offering — despite a long record of appalling human rights and environmental abuses.
But this is dirty money. Any bank that takes it is also buying into Coal India’s human rights and environmental abuses. Amnesty International reported last year that a Coal India subsidiary demolished houses to forcibly evict Indigenous and Dalit families to expand one of its mines.2
And Coal India specializes in open-pit coal mining, which means clear-cutting forests — with grave impacts for forest communities and endangered species like tigers, leopards and elephants. The company touts its reforestation program — but just this summer, a government investigation found that half of the land Coal India claimed it reforested was barren.3
Indeed, broken promises are par for the course for Coal India. The company’s most recent share offering was earlier this year. As a precondition for Goldman Sachs, Bank of America, Credit Suisse, and Deutsche Bank doing the deal, Coal India agreed to a set of environmental and social commitments that it has failed to follow through on. Now, new reports of attempts to mine tiger forests4 and displace communities5 show that the company doesn't take these commitments seriously.
We’ve seen this movie before. Any bank that does this deal risks getting burned again. Take action: Tell them it’s not worth it.
The deadline for banks submitting bids is September 23 — next week. The time to act is now. I’ve been talking to key U.S. banks to warn them away from this deal, but now they need to hear from you. Add your voice!
Recent months have seen major banks taking the lead and committing to get out of coal mining.6 So it’s bitterly ironic that other banks are even considering doing the Coal India deal now. We’re months away from the crucial Paris climate summit, and banks should be doing their part by adopting policies to drop coal — not putting themselves on the wrong side of history by cashing in with the world’s biggest coal company.
1. "Coal India Share Sale is Planned", Wall Street Journal, August 13, 2015
2. "Indigenous and Dalit communities at risk of forced evictions in Chhattisgarh", Amnesty International India, September 4, 2014
3. "50% of reclaimed coal mine area of Coal India is ‘barren’", Hindustan Times, July 12, 2015
4. "Coal winner as tiger area of 300 football fields diverted", The Times of India, September 3, 2015
5. "Chhattisgarh coal mine should not be expanded without genuine consultation", Amnesty International India, February 19, 2015
6. "Bank of America Backs Away from Funding Coal Mining," Huffington Post, May 6, 2015
Abbot Point coal export terminal would harm Great Barrier Reef, worsen global climate change
Photos from today’s petition delivery: http://bit.ly/1N2SjAu
Washington, D.C.—Activists from a coalition of environmental groups delivered over 670,000 petition signatures to the U.S. Export-Import Bank (Ex-Im Bank) today to call on the bank to publicly reject financing for the controversial Carmichael coal mining and export project in Australia. Activists rallied in front of Ex-Im Bank headquarters wearing blue clothing and clownfish hats and holding a coral reef-themed banner to demand that U.S. taxpayer dollars not be used to bankroll the project, which threatens Australia’s iconic Great Barrier Reef, as well as the global climate.
If built, the Carmichael coal mine, along with an associated export terminal at Abbot Point, would dramatically increase coal production and exports from Australia's Galilee Basin, one of the largest stores of coal on the planet. The plan for the new mine and port facility would make Australia the world's leading coal exporter, and lead to an estimated 705 million tons of carbon emissions annually. The project has faced fierce opposition, not only over its climate impact, but over the threats it poses to the Great Barrier Reef. Construction of the new export terminal at Abbot Point would require dredging part of the Great Barrier Reef World Heritage Area, in a plan that has prompted the United Nations Educational, Scientific and Cultural Organization (UNESCO) to consider placing the Great Barrier Reef World Heritage Site on its “in danger” list.
With the project receiving strong support from Australian Prime Minister Tony Abbott’s administration, campaigners have targeted investment banks to try and stop the project from gaining an estimated $16.5 billion in financing needed for the project to move forward. Eleven of the world’s leading private investment banks, including Citigroup, Morgan Stanley, Goldman Sachs, and JPMorgan Chase, have publicly ruled out providing financing to Indian conglomerate Adani Enterprises to build the project. But the U.S. Ex-Im Bank has thus far refused to take a position, amid reports that the bank may be considering a request for financing from Adani.
"If all the coal in the Galilee Basin is dug up and burned, it would have roughly the same carbon impact as burning all of the Alberta tar sands. In other words, we can't allow this project to move forward if we hope to keep climate change below 2C of warming," said Amanda Starbuck, Climate and Energy Program Director at Rainforest Action Network. "On top of that, construction of a new export facility at Abbot Point would require dredging part of the Great Barrier Reef World Heritage Area. Start to finish, this is a dirty, reprehensible plan that the Export-Import Bank should publicly reject. U.S. taxpayer dollars should not be used to bankroll Reef destruction and climate chaos."
“Already eleven major global banks, including the major lenders to Australian coal projects, have said no to this disaster of a project because they see that it ticks every risk box on the books,” said Charlie Wood, 350.org Australia campaigns director. “High levels of public concern about this project have already been demonstrated at the local, national, and international levels, with several million people having taken action to oppose them. This concern will only continue to grow. Ex-Im is placing its reputation on the line by refusing to take a position. They should rule out involvement now,” concluded Wood.
"It's clear that putting a price tag on one of the world's greatest natural treasures is simply not an option,” said John Coequyt, director of the Sierra Club’s International Climate Program. “Time and again, we've seen Big Coal dip its soot-covered fingers in the pockets of American taxpayers to finance dirty, dangerous projects. It's high time Ex-Im put an end to this wasteful cycle once and for all."
"It shouldn't take a PhD in ocean ecology for Ex-Im Bank to figure out it’s a bad idea to support another massive fossil fuel project inside one of the world's most important marine parks,” said Doug Norlen, senior manager of Friends of the Earth’s Economic Policy program. “It’s time for Ex-Im Bank to come clean and publicly declare they will not provide public subsidies to destroy a world heritage area.”
Regarding the U.S. Ex-Im Bank possibly helping to fund the Abbot Point coal port expansion in Australia, Ted Conwell of Climate First! strongly called for "the bank to disassociate itself from the project due to the massive negative effect it will have on global warming. If the coal port is expanded thereby allowing nearby coal mines to sell all their coal, the total CO2 emissions from the project could be three times the lifetime CO2 emissions created by the Keystone XL pipeline."
President Obama and Australian Prime Minister Tony Abbott have repeatedly clashed over coal, climate change, and the Great Barrier Reef. Abbott has called coal “good for humanity,” and has given strong backing to Abbot Point and other coal projects, while President Obama has publicly chided Australia for not doing more to address climate change or protect the Reef. Last month, after strong arm-twisting from the Australian government, UNESCO’s World Heritage Committee issued a draft decision not to designate the Great Barrier Reef as “in danger,” despite analysis from environmental groups showing the Reef has met as many as six out of the eight criteria needed to be added to the “in danger” list.
Claire Sandberg, Rainforest Action Network, 646-641-6431 email@example.com
Cindy Carr, Sierra Club, 202-495-3034, firstname.lastname@example.org
Jenny Bock, Friends of the Earth, 202-222-0754, email@example.com
FOR IMMEDIATE RELEASE:
March 2, 2014
Today PNC Financial Services Group joined the growing ranks of financial institutions that have officially sanctioned the coal mining practice known as mountaintop removal (MTR.) Citing concerns about the environmental and health impacts of MTR, as well as financial risks, PNC pledged to no longer extend credit to individual MTR mining projects or to firms with 25 percent or more of their production coming from MTR.
Rainforest Action Network (RAN), which has for years worked to push the financial sector to disavow MTR, hailed the new PNC policy as a positive indication that MTR is increasingly seen as being unbankable. “PNC took a big step in the right direction today by acknowledging the serious health and environmental impacts of mountaintop removal, and by committing to reduce its exposure to this toxic practice. We’ll be scrutinizing PNC’s future financing decisions to see how this new policy is implemented,” said RAN Climate and Energy Program Director Amanda Starbuck. “Overall, we see today’s news as indicative of a broader trend within the financial sector. Banks no longer want to be associated with a dangerous, abhorrent practice like mountaintop removal; there is an emerging financial industry consensus that these practices are unacceptable. Concretely, this means mountaintop removal companies will have a harder time securing financing to operate and expand in the future.”
PNC’s new MTR policy, released today as part of the PNC Financial Services Group, Inc. 2015 Corporate Responsibility Report (available online here), reads as follows:
“Driven by environmental and health concerns, as well as our risk appetite, we introduced a mountaintop removal (MTR) financing policy in late 2010 and subsequently enhanced that policy in 2014. As a result, our MTR financing exposure has declined significantly and will continue to do so moving forward. Overall, PNC’s exposure to firms participating in MTR represents less than one-quarter of 1 percent of PNC’s total financing commitments. Under the policy, PNC will not extend credit to individual MTR mining projects or to coal producers with 25 percent or more of their production coming from MTR mining.”
In an introduction to the 2015 CSR report, PNC CEO William Demchak also wrote, “Our businesses implemented a number of important changes in 2014 to make environmental considerations a more prominent factor in PNC’s lending while still balancing those considerations with the economic needs of the communities we serve. As part of these efforts, we enhanced PNC’s mountaintop removal (MTR) financing policy. Due to environmental and health concerns, as well as our risk appetite, our MTR financing exposure has declined significantly over time, with current exposure to firms participating in MTR representing less than one-quarter of one percent of PNC’s total financing commitments, and it will continue to decline.
Thanks to your pressure, several of the world’s largest banks have said “no” to financing a huge coal project that would put Australia’s Great Barrier Reef at risk.1 But now, news reports have revealed that the U.S. government’s Export-Import Bank is considering financing this destructive project.2
This is an outrage: The U.S. government should be investing in climate solutions, not throwing coal a financial lifeline and trashing a global treasure such as the Great Barrier Reef. Even Wall Street thinks the coal industry's plan to build a giant coal port in the middle of the reef is too toxic to fund; late last year, thanks to your activism, Rainforest Action Network secured commitments to steer clear of the project from four of the biggest investment banks on Wall Street. Citibank, JPMorgan Chase, Morgan Stanley, and Goldman Sachs all provided RAN with written promises to stay away from this climate- and reef-killing project.3 If this project is beyond the pale for Wall Street's biggest banks, there's no excuse for the U.S. government to commit taxpayer money to destroy the reef and turbocharge climate change.
We know that our pressure can help to stop the coal industry’s reef destruction. Thanks to your pressure, major banks have publicly committed not to fund this project, because it would be a disaster for the climate, the reef, and their bottom lines. Not only would this perpetuate climate chaos, the proposed Abbot Point expansion could threaten the breeding grounds of endangered green and loggerhead turtles.4 Now, it is time to use our voices to prevent the U.S. government from financing reef destruction.
Momentum is building to stop the coal industry from damaging the Great Barrier Reef. President Obama recently spoke out at a summit, urging Australia to protect the reef.5 Hundreds of thousands of global citizens have spoken out against reef destruction, and a group of ten European and U.S. banks has already walked away from the project. Now we need to make sure the U.S. government says “no” to coal port expansion in the Great Barrier Reef.
As an agency of the U.S. federal government, the Export-Import Bank’s mission is to finance the sale of U.S.-made products, not to finance foreign-owned coal ports across the world. If we speak up, Export-Import Bank chairman Fred Hochberg will hear us. Late last year, Hochberg urged the public to submit feedback about how the bank is doing. Now is the time to send a clear message that the taxpayer-supported Export-Import bank needs to stay away from the coal industry’s Great Barrier Reef destruction.
1. "US Banks baulk at Abbot Point coal port expansion", The Australian, October 28, 2014
2. "Adani lines up $1 bln Indian state bank loan for Australian coal venture", Reuters, November 17, 2014
3. "US banks vow not to fund Great Barrier Reef coal port, activists say", The Guardian, October 27, 2014
4. "Great Barrier Reef", United Nations Educational, Scientific and Cultural Organization
5. "Barack Obama confronts Australia over climate change", The Telegraph, November 15, 2014