Despite net zero liabilities, banks are still financing the dirtiest fossil fuel

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A coal-fired power plant on the outskirts of Linfen in China’s Shanxi province. Soot produced by chimneys has been found to cause respiratory problems in humans. Photograph: © Peter Parks/AFP/Getty Images

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 zero net pledges, according to a Global Coal report. Urgewald Exit List (GCEL).

Urgewald’s Global Coal Exit List (GCEL) is a powerful information tool and has played an influential role in shaping new coal policies for financial institutions. The list is a publicly accessible database that provides data on many private companies that are otherwise difficult to access. This information is particularly relevant for banks and insurers.

Despite repeated promises of net zero, green slogans and recognition that carbon emissions must be reduced in order to avoid climate catastrophe, GCEL, a group of 28 non-governmental organizations (NGOs) has shown that international banks and Investment institutions were continuing to funnel money into coal, according to a report released Tuesday, according to Fortune.

The most disturbing information to emerge from the report is that, although these financial institutions still have equity or debt in existing coal-fired power plants or finance the cost of building new ones, many have publicly signed “net zero” to reduce carbon emissions.

According to CTV News Canada, banks continue to finance 1,032 companies involved in coal mining, trading, transportation and use, research showed.

“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.”

Electricity generation from coal and natural gas hit record highs last year, says IEA – Copyright AFP Ed JONES

The study says banks in six countries – China, the United States, Japan, India, Britain and Canada – were responsible for 86% of global coal financing during the period.

Direct lending amounted to $373 billion, with Japanese banks Mizuho Financial and Mitsubishi UFJ Financial – both members of the Net Zero Banking Alliance – identified as the two largest lenders.

Mizuho told Reuters 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.

Another $1.2 trillion was funneled to coal companies through underwriting. All of the top 10 underwriters were Chinese, with the Industrial and Commercial Bank of China (ICBC) in first place at $57 billion.

British bank Barclays came in fourth place and US bank Citigroup came fifth for the number of coal projects on their balance sheets, behind Japanese banks Mizuho Financial, Mitsubishi UFJ Financial and ICBC.

Institutional investment in coal companies during the period totaled $469 billion, with BlackRock topping the list with $34 billion, CNN News reports. The US asset manager declined to comment on Tuesday, however, 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.

Almost all investment in new coal projects came from China, with only one non-Chinese company entering the top 10 – US bank JP Morgan Chase, ranking seventh in terms of largest bank lenders to the coal industry. according to the report.

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.

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