Shanghai – Financial institutions funneled more than $1.5 trillion into the coal industry in the form of loans and subscriptions from January 2019 to November 2021, though many made “net zero” pledges, according to a report from a group of 28 non-governmental organizations.
Reducing coal use is a key part of global efforts to reduce global warming greenhouse gases and get emissions to net zero by mid-century, and governments, businesses and financial institutions around the world have pledged to act.
But banks continue to finance 1,032 companies involved in coal mining, trading, transportation and use, according to the research.
“Banks like to say they want to help their coal customers transition, but the reality is that almost none of these companies are transitioning,” said Katrin Ganswind, head of financial research at the environmental group. German Urgewald, who led the research. “And they have little incentive to do so as long as the bankers keep writing them blank checks.”
The study says banks in six countries – China, the US, Japan, India, the UK and Canada – were responsible for 86% of global coal financing during the period.
Direct lending amounted to $373 billion, with Japanese banks Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. – both members of the Net Zero Banking Alliance – identified as the top two lenders.
Mizuho said in a statement that the report did not reflect the “actual situation”. He said he further develops sustainability strategies with his clients through services such as transition finance and consultancy.
Mitsubishi UFJ did not immediately respond to requests for comment.
Another $1.2 trillion was funneled to coal companies through underwriting. The top 10 underwriters were Chinese, led by the Industrial and Commercial Bank of China (ICBC) with $57 billion. He did not respond to a request for comment.
Institutional investments in companies still developing coal assets amounted to $469 billion, led by BlackRock with $34 billion.
The US asset manager declined to comment on Tuesday, but chief executive Larry Fink wrote in January that “divesting entire sectors…will not bring the world back to net zero.”
“Foresighted companies across a wide range of carbon-intensive sectors are transforming their businesses, and their actions are a critical part of decarbonization,” he wrote in a letter to fellow CEOs. BlackRock’s coal-related equity and bond total during the period was $109 billion, according to the NGO’s report.
Comparative coal finance figures for previous years were not immediately available. Other research studies, however, have shown that investment in coal is on the decline.
The coal sector is responsible for nearly half of global greenhouse gas emissions. More than 40 countries pledged to end the use of coal following climate talks in Glasgow in November, although major consumers such as China, India and the United States did not agree. not registered.
According to a study by the Center for Research on Energy and Clean Air (CREA) last June, more coal-fired power capacity invested by China overseas has been canceled than commissioned since 2017.
Nearly all development funding available internationally is now committed to reducing or ending investment in coal-fired power plants after China and the Group of 20 decided to stop supporting new overseas projects, shown in November research from Boston University’s Global Development Policy Center.
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