Banks such as Barclays have funnelled billions to the European coal market since UN scientists warned that we have 10 years left to avert the worst consequences of climate change.
A new report by Europe Beyond Coal, of which ShareAction is a member, has found that European banks Unicredit, BNP Paribas, Barclays and Societe Generale have been keeping Europe’s top eight coal utilities afloat, putting the 1.5C goal of the Paris Agreement into jeopardy.
These top eight coal utilities - including RWE, PGE and Fortum/Uniper – are responsible for half of all EU coal-based CO2 emissions. Barclays has poured €1.7 billion into these companies, the new report, called Fool’s Gold - The financial institutions risking our renewable energy future with coal, finds.
UniCredit was the worst offender, providing €2.8 billion in loans and underwriting services since October 2018 when the IPCC report landed, followed by BNP Paribas with €2.1 billion, Barclays, and Societe Generale with €1.3 billion.
Europe’s most coal-exposed investor is the Norwegian Government Pension Fund, which invested €1.5 billion in shares and bonds, closely followed by Crédit Agricole with €1.4 billion, Allianz with €1.1 billion, and Deutsche Bank with €1.0 billion. Internationally, BlackRock’s investments totalled €7.0 billion.
In 2020, European financial institutions have released nearly one new policy limiting financial ties to coal companies per week. However, this report shows that a significant amount of financial support for coal-heavy companies continues unabated.
For example, in March 2020 Barclays published a new coal policy and committed to be net zero by 2050, in response to a resolution filed by ShareAction and a group of 11 institutional investors. Barclays’ new coal policy prohibits financing to clients with more than 50% of revenues from thermal coal as of 2020, decreasing to 30% in 2025, and 10% in 2030. Yet, given the unprofitability of coal in Europe this policy is unlikely to be effective. Indeed, both Fortum/Uniper and Enel have reported that the coal share of their revenues is 2-4%.
Jeanne Martin, senior campaign manager at ShareAction, says: “Today’s report is further proof that Barclays is miles off aligning its fossil fuel financing with the climate imperatives of the Paris agreement, despite recently setting an ambition to be a net zero bank by 2050. As a minimum, Barclays needs to close the loophole in its coal policy - far from its only shortcoming - which allows finance to flow to freely to coal utility giants, or its ambition could prove merely a pipedream"
Additional data compiled by research organisation Profundo finds that HSBC has been financing the European coal industry to the tune of €478.97 million.
“Despite receiving lots of awards for its work on sustainable finance, British bank HSBC is one of the few remaining European banks with no financing restrictions for coal-heavy companies. HSBC needs to walk the talk and phase out support for the coal industry now,” says Martin.
A recent survey of Europe’s largest 20 publicly-listed banks on climate change undertaken by ShareAction shows the vast majority of European banks’ strategies on climate change are not aligned with the goals of the Paris Agreement. While 35% of banks surveyed claimed that their strategies are aligned with the Paris climate goals, none of the banks surveyed was placed in the “best practice” category.
“Any bank thinking of committing to net zero by 2050 should have a serious look at their fossil fuel financing first,” says Martin.
Notes to editors:
- For more information, please contact Beau O’Sullivan on email@example.com or +447950 299 491
- The report can be accessed at here. The appendix contains data on HSBC’s financing of the European coal industry,
- Europe’s eight most polluting coal companies: RWE, PGE, EPH, ČEZ, Enel/Endesa and Fortum/Uniper.
- Full list of authors: Europe Beyond Coal and its partners, BankTrack, BlackRock’s Big Problem, Ember, Foundation "Development YES - Open-Pit Mines NO", Friends of the Earth Finland, Friends of the Earth France, Greenpeace, Reclaim Finance, Re:Common, ShareAction, Urgewald and 350 Japan.
- Climate Analytics estimates that Europe and OECD countries have to phase out from coal by 2031 to meet the 1.5C goal.
- Financial institutions headquartered in Europe with new coal polices announced this year: Aegon, Lloyds, ABP, Pictet, Ilmarinen, The Royal Bank of Scotland, Crédit Mutuel, UBS, AG2R, Barclays, Union Investment, Deka Bank, HSBC, Ecofi, Allianz, BNP Paribas, Natixis, Rothschild & Co, Intesa Sanpaolo, SCOR, Groupe Macif, OFI Asset Management, Societe Generale.
- ShareAction is a campaigning organisation pushing the global investment system to take responsibility for its impacts on people and planet, and use its power to create a green, fair, and healthy society. shareaction.org
- Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. Our groups are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner. beyond-coal.eu