Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

Dirty Banks Exposed for $20 Billion Investment in Dying Coal Industry

Climate
Dirty Banks Exposed for $20 Billion Investment in Dying Coal Industry

Rainforest Action Network Sierra Club BankTrack

This week, Rainforest Action Network (RAN), Sierra Club and BankTrack released the fourth annual coal finance report card, Extreme Investments: U.S Banks and the Coal Industry. The report finds that in 2012, the banking sector financed $20.8 billion for the dirtiest coal companies, even as U.S. coal consumption for power generation fell 11 percent and as mounting scientific evidence confirmed coal’s extreme impact on health and climate change. It ranks Bank of America, Citigroup and JPMorgan Chase as the top three financiers of the “worst of the worst” coal companies, including operators of coal-fired power plants and mountaintop removal (MTR) coal mines.

The report also found that the top three U.S. financiers of the coal industry—Bank of America, Citigroup and Chase—collectively financed an estimated $9 billion for mountaintop removal mining companies and the most coal-intensive power utilities last year. The report details how financial practices failed to address risks and impacts of an industry in decline and underscores the need for banks to take steps to reduce exposure to coal.

"The bottom line is, any bank funding coal puts our health and the climate at risk,” said Ben Collins, research and policy campaigner for Rainforest Action Network's energy and finance program. “The acute environmental and financial risks of coal have already begun to materialize. For the health of our communities and the sake of our future energy supply, banks must take clear, measurable steps to address the impacts of their coal financing.”

The report includes case studies on the most risky coal investments banks are exposed to, including Patriot Coal, which declared bankruptcy in 2012 and began to phase out its MTR mining operations, and the Tennessee Valley Authority, which recently announced controversial plans to extend the life of a coal plant.

“Mountaintop removal coal mining brings destruction, health problems and human rights violations to the people of Appalachia,” said Mark Kresowik, the corporate accountability representative for the Sierra Club's national coal campaign. “Eastern operations like those at Arch Coal and Alpha Natural Resources are awful investments for the American banking industry. In fact, shares of companies with MTR mines lost an average of 40 percent of their value between April 2012 and April 2013 and only one of the 13 largest MTR companies had an S&P credit rating above ‘junk.’ It’s time for our banks to invest in smart, clean alternatives that don’t risk our health or the health of our economy.”

The report points out that while many of the banks have adopted environmental policies and due diligence processes, these have had little measurable impact on financing provided to the most polluting coal companies. One notable exception was Wells Fargo bank, which demonstrated substantive improvements in its mountaintop removal lending practices in 2012, resulting in a “C” grade.
 
Of the banks graded for 2013, BNY Mellon received the lowest grades, failing in both categories of exposure to mountaintop removal mining and coal fired power plants. Goldman Sachs and US Bank received two “D’s” and PNC Financial failed for its coal power financing. Bank of America and Citigroup tied for most exposure to mountaintop removal, financing companies that mined 42 percent of all MTR coal produced in 2012.  
 
The report finds that the environmental, social and financial risks involved with the entire life cycle of coal from mining, to production to export are likely to grow even more acute over time. It urges banks to shift financing toward clean energy and plan for a carbon constrained future. Specific recommendations include phasing out lending to the largest producers of mountaintop removal coal, ensuring that coal financing deals commit banks and companies to emissions reductions and withholding financing for new coal export terminals.

Visit EcoWatch’s CLIMATE CHANGE and ENERGY pages for more related news on this topic.

——–

Click here to tell Congress to Expedite Renewable Energy.

 

One report in spring 2020 found that 38% of students at four-year universities were food-insecure. Frederic J. Brown / AFP / Getty Images

By Matthew J. Landry and Heather Eicher-Miller

When university presidents were surveyed in spring of 2020 about what they felt were the most pressing concerns of COVID-19, college students going hungry didn't rank very high.

Read More Show Less

EcoWatch Daily Newsletter

Coast Guard members work to clean an oil spill impacting Delaware beaches. U.S. Coast Guard District 5

Environmental officials and members of the U.S. Coast Guard are racing to clean up a mysterious oil spill that has spread to 11 miles of Delaware coastline.

Read More Show Less

Trending

Plain Naturals offers a wide variety of CBD products including oils, creams and gummies.

Plain Naturals is making waves in the CBD space with a new product line for retail customers looking for high potency CBD products at industry-low prices.

Read More Show Less
What happened to all that plastic you've put in the recycling bin over the years? Halfpoint / Getty Images

By Dr. Kate Raynes-Goldie

Of all the plastic we've ever produced, only 9% has been recycled. So what happened to all that plastic you've put in the recycling bin over the years?

Read More Show Less
Donald Trump and Joe Biden arrive onstage for the final presidential debate at Belmont University in Nashville, Tennessee, on Oct. 22, 2020. JIM WATSON / AFP via Getty Images

Towards the end of the final presidential debate of the 2020 election season, the moderator asked both candidates how they would address both the climate crisis and job growth, leading to a nearly 12-minute discussion where Donald Trump did not acknowledge that the climate is changing and Joe Biden called the climate crisis an existential threat.

Read More Show Less

Support Ecowatch