Hundreds of financial institutions funneled $1.5 trillion in loans and underwriting into the coal industry from January 2019 to November 2021, despite many making net-zero commitments, according to research by a coalition of 28 non-government organizations.
Governments, businesses, and financial institutions all across the globe have vowed to reduce coal consumption as part of global efforts to reduce climate-warming greenhouse gases and bring emissions to “net zero” by the middle of the century.
Banks, on the other hand, continue to fund 1,032 companies involved in coal mining, trade, transportation, and utilization, according to the study.
“Banks like to say they want to assist their coal clients to change, but the truth is that nearly none of these companies are moving,” Katrin Ganswind, head of financial research at Urgewald, the German environmental group that spearheaded the study, said. “And as long as bankers continue to write them to blank checks, they have little reason to do so.”
According to the analysis, banks from six nations accounted for 86 percent of worldwide coal finance over the period: China, the United States, Japan, India, the United Kingdom, and Canada.
Direct loans were $373 billion, with the two largest lenders being Japanese investment banks Mizuho Financial and Mitsubishi UFJ Financial, both members of the Net Zero Banking Alliance. Requests for comment were not immediately returned by either firm.
Underwriting provided another $1.2 trillion to coal companies. The top ten underwriters were all Chinese, with the Industrial Commercial Bank of China (ICBC) taking the first spot with $57 billion in underwriting. A request for comment was not returned.
Institutional investments in coal companies totaled $469 billion throughout the period, with BlackRock leading the pack with $34 billion. A request for feedback from the asset manager in the United States was not returned.
There were no comparable numbers for previous years available right away. Other studies, on the other hand, have found that coal investment is declining.
Nearly half of worldwide greenhouse gas emissions come from the coal industry. Following climate talks in Glasgow in November, more than 40 countries promised to phase out coal use, while big customers such as China, India, and the United States did not sign.
According to research published in June by the Centre for Research on Energy and Clean Air (CREA), more China-invested abroad coal-fired power generation has been canceled than commissioned since 2017.
Furthermore, following moves by China and the G20 to stop supporting new projects overseas, nearly all internationally available development financing is now committed to reducing or ending investment in coal-fired power, according to research released in November by Boston University’s Global Development Policy Center.
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