November 11, 2020 – Today, Urgewald and 30 partner NGOs, including Reclaim Finance, released a new update to the “Global Coal Exit List” (GCEL), the world’s most comprehensive database of companies operating along the thermal coal value chain. This comes as the ACPR and AMF, the French financial regulatory institutions, call on French financial institutions to publicly indicate the data sources that they use to implement their policy on coal. In France, the main competitor against Urgewald’s GCEL is Trucost, used by the French banking federation. Today, Reclaim Finance exposes the US data provider’s weaknesses and calls on all French financial institutions to use the GCEL. Our ability to exit coal on time lies upon this technical debate.
The GCEL (1) features 935 parent companies as well as over 1,800 subsidiaries and affiliates, whose activities range from coal mining, coal trading and transport to coal power generation and manufacturing of equipment for the coal industry. Overall, the companies listed in the GCEL represent 88% of the world’s thermal coal production and nearly 85% of the world’s coal-fired capacity.
“We are in a climate emergency, and a speedy exit from coal is more urgent than ever. Our database identifies 935 companies the finance industry needs to blacklist if it is serious about fulfilling the Paris goals”, says Heffa Schücking, director of Urgewald.
The GCEL launched in November 2017 and is updated each fall. It has played an influential role in shaping the coal divestment actions of many large investors, including AXA. Over 400 financial institutions are now registered users of the database, but not all use it as the backbone of their policy.
Like the IFC, the French financial regulatory bodies AMF and ACPR used the GCEL to assess the exposure of French financial institutions to coal (2). The French Insurance Federation and the French Association of Asset Managers also recommended their members to use the GCEL. Conversely, if it did not recommend a specific database to its members, the French Banking Federation used a list of 500 companies provided by Trucost to assess the exposure of its members to the coal sector (3).
The FBF justifies its decision by referring to the “completeness” of its list and its capacity to provide the coal share of their revenues. In fact, the “Trucost-FBF list” misses hundreds of companies operating in the coal sector, including some of the biggest coal producers and coal power producers as well as 216 coal plant developers. Moreover, analyses by Reclaim Finance, based on a comparison of the GCEL and Trucost’s data (4), shows that the data provided by Trucost are sometimes misleading.
“This illustrates perfectly what the French Minister of Economy and Finance Bruno Le Maire stated at the Climate Finance Day when calling French financial institutions to align their coal exit policies on the best practices. Beyond the importance of using the right set of exclusion criteria lies the issue of the data used by banks, insurers, and asset managers to define the coal sector and implement their policy. To use a very limited list of coal companies, based on unreliable data, would automatically lead us to fail on the litmus test for climate: leaving coal behind” comments Lucie Pinson, founder and executive director of Reclaim Finance.
Like the AMF and ACPR that warn about the risk of financial institutions’ “cherry picking the most favorable data source allowing to place a company below the defined thresholds in an opportunistic manner”, Reclaim Finance calls French financial institutions to disclose the data they use to implement their coal exit policies and adopt policies based on a different set of criteria – and not only the coal share of revenues – to avoid missing important coal companies but cover the whole coal value chain. More precisely, Reclaim Finance calls them to adopt and implement the criteria used by Urgewald to identify the companies featured in its Global Coal Exit List.