Last week I was delighted to hear that the European Development Bank is to stop financing coal fired power stations, in order to help Europe reduce pollution and meet its climate targets. The decision followed an earlier statement from the World Bank that in the future it will fund new coal plants only “in rare circumstances”.
Concern about climate change and the need for alternative energy sources has caused these two global banking institutions to think twice about funding coal, which is the dirtiest of all the so–called ‘conventional’ fossil fuels. Could our own high street banks and pension funds follow their lead and pull out of investment in coal?
When I first joined the World Development Movement four years ago, we were campaigning to stop the ‘new coal rush’ of planned coal-fired power stations across Britain. After a gap of 20 years, the UK governments wanted to build new coal plants – and to hell with any climate targets!
In Scotland, a new power station was proposed for Hunterston in Ayrshire. After a long campaign working with a coalition of NGOs and community groups, common sense prevailed and preparations for a new coal plant were scrapped. In England, WDM was also involved in a coalition that stopped the building of a new coal power station at Kingsnorth in Kent. Unfortunately though, demand for coal remains high across the globe, with the World Resources Institute announcing last year that more than one thousand new coal plants are planned world-wide.
UK banks and pension funds are feeding global demand for coal with their finances. They provide this through shares and bonds to the world’s biggest mining companies listed on the London stock exchange. Shares in coal on the FTSE 100 amount to £185 billion. This is in comparison to shares in renewable energy, which amount to a minuscule £5 billion. The UK’s three main high street banks are amongst the world’s leading coal funders. Between 2005 and 2011, Barclay’s coal financing was worth at least £9.6 billion; Royal Bank of Scotland invested £9.2 billion and HSBC £3.7 billion.
Here in Scotland, we’ve been campaigning for the Royal Bank of Scotland to stop investing in dirty energy projects since as taxpayers we became majority shareholders in 2008. Once known as ‘the oil and gas bank’, RBS also invests heavily in coal. Research published in March 2011 ranked all international banks according to the amount of finance they provided to the twenty biggest coal mining operators in the world: RBS was ranked eighth out of 35 banks. And it is the largest, most environmentally destructive mining projects that the bank funds: like mountaintop removal in the America’s Appalachan Mountains; and the Cerrejon coal mine in Colombia – one of the largest mines in the world. RBS Chairman Philip Hampton is non-executive director at the Anglo-American mining company, and the bank provides finance for the three multinational companies that own the mine.
So that is why, four years on, I am campaigning on coal once again, but this time I am following the money! And it’s my money I’m following. If, like me you are a tax payer and you are putting money into a pension fund for your retirement, then you too are probably investing in coal. The European Investment Bank and the World Bank have set a precedent: it is possible for banks to switch their finance away from dirty energy projects that cause climate change. It’s time to increase the pressure on our banks and pensions funds to follow suit and keep coal in the hole!