Paris, we have a problem – help end bank financing of coal before the UN climate summit

posted by Benjamin Collins

Guest post from Catalina von Hildebrand, BankTrack

RAN supporters have heard about the changes underway at the top US banks when it comes to their financing relationships with the coal industry – even though these banks still have a long way to go to end financing for coal. To help keep the pressure on banks, the Paris Pledge campaign to end bank financing of coal needs your help!

Working with BankTrack, I am a RAN supporter as well as a coal campaign partner, and I’ve seen the organisation successfully work for some years now on a string of campaigns aimed at getting Wall Street banks to start living up to the ‘sustainable/green/responsible investment’ copy that adorns their glossy publications. If there’s a place for this to start, it undoubtedly is – as RAN has identified – with the ending of these banks’ multi-billion dollar financing relationships with companies that engage in the number one threat to the climate and to communities in the US and around the world: the extraction and burning of coal.

Already this year, sustained RAN campaigning has been instrumental in Bank of America’s announcement of a new global coal mining policy which commits the bank to reducing its exposure to coal mining companies across the board.

Citigroup also stepped up – to some degree – earlier this month with an update to its environmental policy statement that sees the bank embarking upon a reduction in its credit exposure to coal mining: “going forward, we commit to continue this trend of reducing our global credit exposure to coal mining companies.” As RAN Senior research and policy campaigner Ben Collins has also noted, however, there are big gaps associated with Citigroup’s ‘advance’ on coal: it is incomplete, covering only part of Citigroup’s banking relationships with coal mining companies; it lacks a clear timeline and phase-out commitment, and; it does not address Citigroup’s financing relationships with coal-fired power (nor, for that matter, does BoA’s new coal commitment extend to the financing of coal power).

These announcements are just part of what is becoming a growing climate cacophony from the banks, what with the crunch UN climate summit (COP21) in Paris now a mere month away. Other calls from Wall Street have been sounded too, though as we’ve reflected at BankTrack, there tends to be more mouth than teeth involved in these announcements. Meanwhile, amidst the latest spate of crisis stories and stock prices enveloping the global coal industry, Goldman Sachs, boldly declared in September that “The industry does not require new investment.” The investment bank, needless to say, has not announced that it is pulling out of coal financing.

The pre-Paris climate hype from the banks, though, has really been revealed for what it is by a new report hailing from within the financial sector itself.

Boston Common Asset Management looked at and assessed 61 of the world’s largest banks on their management of climate-related risks. “Despite welcomed statements and announcements by some banks ahead of COP21,” reads the report’s accompanying press release, “few are taking a strategic approach to these potentially game changing developments. There remains a huge divide between banks’ current practices and the financial sector’s potential to support the transition to a low-carbon future” (emphasis added).

Boston Common’s Managing Director, Lauren Compere further points out that “COP21 highlights the significant need for investments to transition the world to a low carbon economy. Banks have a critical role to play here. As the Governor of the Bank of England said earlier this month there is still time to act, but the window of opportunity is finite and shrinking.”

This is the crux of our Paris Pledge campaign to get the world’s biggest banks to commit to winding up their support for coal. And with 11 ethical bank signatories to the pledge so far, over 150 environment group supporters and close to 10,000 individual supporters from around the world, that’s why we are ramping up the campaign in the final weeks before Paris: to address this fundamental disconnect between the big banks’ climate rhetoric and their climate inaction that could well contribute to making a mockery of global aspirations for a constructive, ambitious deal at COP21.

As Amanda Starbuck, our long time friend and colleague at RAN, has put it in the past: “We don’t need banks to change the lightbulbs at their corporate headquarters, we need them to stop bankrolling fossil fuels that are killing the climate.”

Add your voice to the Paris Pledge campaign right now and help pressure the coal banks to start taking urgent action. Who knows – a real climate lightbulb moment at one or more of the banks may just be weeks away.