Press release – Reclaim Finance and seven partner NGOs*
Paris, 19 April 2021- The world’s leading initiative to phase out coal is ‘not fit for purpose’, according to a new report from Reclaim Finance and seven partner NGOs. The report’s findings reveal that many members of the Powering Past Coal Alliance (PPCA), notably financial institutions like Schroders, L&G and CalPERS, have failed to align themselves with a timely exit from the most polluting fossil fuel. The authors are calling on PPCA co-chairs Canada and Britain to lead by example and ensure their members align with best practices on phasing out coal.
Reclaim Finance analyzed the progresses made by the 111 PPCA members – including states, financial institutions, companies and local governments – toward a coal exit. The Paris-based NGO found that the foundation of the alliance – the PPCA declaration and Finance Principles – itself contained major loopholes that allow its members to satisfy its criteria while remaining important players in the coal sector and, in some cases, even contributing to its development.
Financial institutions who are members of the PPCA are particularly failing to take action on coal, with just 2 out of 23 on track to exit coal and 15 not having taken any credible step to reduce their support to the sector. Worse still, eight of them don’t even have any coal policy and most can still support companies that are building new coal assets. As of January 2021, the 23 PPCA financial members had collectively invested more than $38 billion in major coal companies.
Lucie Pinson, Founder and Executive Director of Reclaim Finance remarks: “When it comes to the PPCA and its members, it’s clear that talk is cheap. A large majority of financial institutions that joined the PPCA have not taken any measure indicating a willingness to exit coal. Worse, 80% of them – including Schroders, ASI, CalPERS and L&G – can continue to invest in many companies building new coal plants, mines and infrastructures. In a nutshell: financial institutions have taken full advantage of the PPCA’s flawed framework and loose monitoring to continue feeding the coal frenzy.”
Sandy Emerson, Board President, Fossil Free California, underlines: “Coal, the dirtiest fossil fuel, has no place in our future and should have no place in our pension funds. CalPERS could use its $400 billion financial leverage to help the world power past coal; instead, CalPERS continues to hold $8 billion in coal-fired power plants, coal mines, and other coal-related investments. CalPERS and the PPCA need to get serious about phasing out coal!”
The PPCA co-chairs – UK and Canada – are not setting the pace for a credible coal phase-out. Despite pledges to exit coal power generation respectively by 2024 and 2030, the UK is considering a new coal mine while Canada is developing 13 new mines that could cause GHG emissions that equate to a fifth the annual emissions of France.
Mexico and Senegal did not adopt any phase-out date and Germany is planning to exit coal eight years later that what the PPCA recommends. Similarly, nine local government members of the PPCA remain reliant on coal and took no measure to prepare a coal exit.
“It is deeply hypocritical that Canada showcases its co-chairmanship of the Power Past Coal Alliance as an example of global climate action while at the same time allowing massive coal exports and planning the expansion of coal mines,” says Patrick DeRochie, Manager with Shift Action for Pension Wealth and Planet Health. “Even worse, Canada’s major financial institutions continue to pour billions of dollars into coal companies and projects around the world. Not a single one of Canada’s Big Five banks or Maple Eight pension funds have a meaningful coal exclusion policy. As co-chair of the PPCA, Canada must do better.”
Reclaim Finance, Fossil Free California, Shift Action, Environmental Defence, The Canadian Health Association for Sustainability and Equity (CHASE), Climate Fast, Urgewald and Re:Common call on PPCA members to finally get on track to exit coal by Paris-Aligned dates and on the Alliance itself to evolve to meaningfully contribute to a swift global coal exit.
Paddy McCully, Energy Transition Analyst at Reclaim Finance, remarked: “As COP26 looms, this is the last chance saloon for the PPCA. If they don’t want the initiative they lead to act as a smokescreen for financial institutions to carry on polluting, the UK and Canada need to give the PPCA teeth so it starts living up to its name. When it comes to powering past coal, there’s no time to lose.”