Ditching coal is a smart business move – and banks are acknowledging itWe Mean Business
The banking system is stepping up to the climate challenge by moving away from investing in coal and choosing cleaner alternatives instead.
Major American bank Citigroup, recently announced plans to reduce coal financing, showing that there is growing momentum in the banking community for clean investments and that support for the coal industry is in ‘terminal decline’.
Australia’s ANZ bank announced on Tuesday that it will invest US$7 billion in low-carbon projects by 2020 and stop financing coal-fired power plants.
The European Investment Bank (EIB) also recently committed to increase its investments in climate-resilient projects over the next five years.
In September, Climate Week NYC saw six major U.S. banks taking on stage to make their first joint call for a global climate deal.
Bank of England Governor Mark Carney recently gave a speech at Lloyd’s London about the threat of global warming. He stated that “The combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longer-term prosperity.”
He concluded his speech saying that: “By managing what gets measured, we can break the Tragedy on the Horizon.”
But this hasn’t been the first time the Bank of England has expressed strong warnings on climate risks and fossil fuels investment. Governor Mark Carney stated last year that, if we are to stay within the limit of two-degrees of warming, the “vast majority of reserves are unburnable”, and called on investors to evaluate the long-term impacts of their decisions.
In August the London-based bank Standard Chartered pulled out of a vast coalmining project in Australia, which had sparked a great debate about the danger it posed to the Great Barrier Reef.
With the major international banks raising the stakes in the low-carbon movement, there is growing hope about the role that climate finance will play in the next phase of the climate challenge.