Abridged press release – urgewald, Reclaim Finance and 40+ partner organizations
Berlin, Paris, 7th October – Three weeks before the start of the UN Climate Summit in Glasgow, Urgewald and 40 partner NGOs, including Reclaim Finance, have released the 2021 update of the “Global Coal Exit List” (GCEL). The GCEL provides detailed data on 1,030 companies and around 1,800 subsidiaries operating along the thermal coal value chain. It is the world’s most comprehensive public database on the coal industry. While some financial actors ask clients for a coal exit plan, Reclaim Finance and Urgewald have shared a list of 10 criteria to take into account when evaluating these plans.
- Out of the 1,030 companies listed on the 2021 GCEL, 503 companies (i.e. 49%) are still planning to develop new coal power plants, new coal mines or new coal transport infrastructure. Up to 480 GW of new coal-fired power capacity and 1,800 million tons per annum of new thermal coal mining capacity are still in the pipeline. If realized, these projects would increase the world’s coal power capacity by 23% and thermal coal production by 27%.
- Since the Paris Climate Agreement was signed, the world’s installed coal-fired capacity has grown by 157 GW, an amount equal to the operating coal plant fleets of Germany, Russia, Japan and Turkey combined.
- Only 49 of the 1,030 companies on the GCEL (i.e. 5%) have announced a coal exit date. And in one third of these cases, the coal exit dates are far too late. Cases in point are the Japanese trading house Marubeni and Japan’s Sumitomo which plan for a late exit and are still building new coal plants. Other issues are related to the decision to sell instead of close assets (eg. BHP, Anglo American, Glencore) or to convert coal plants into biomass or gas (eg. Engie). Other companies block the transition while suing against coal closures (eg. RWE, Fortum/Uniper).
- While more than 25 financial institutions request that their clients adopt coal exit plans, none have explained in any detail what these exit plans must include. Reclaim Finance and Urgewald have published a briefing today to help financial institutions assess the robustness of their clients’ coal transition plans. “Credible Transitions or Greenwashing”” identifies 10 key criteria for financial institutions to use when deciding whether to maintain financial services to coal companies.
- According to the Coal Policy Tool, 200 major financial institutions do not yet have any kind of coal exclusion policy and around 250 financial institutions have coal policies with significant loopholes. Only 25 financial institutions have robust policies that exclude the majority of companies on the GCEL and require remaining clients to adopt an asset-based coal phase-out plan.
“As long as investors, banks and insurers continue supporting the companies listed on the GCEL, it will be impossible to phase out coal in time. Many financial institutions justify their continued support of the coal industry by claiming that they want to help their clients transition. But our research shows that the vast majority of companies on the GCEL are not transitioning” says Heffa Schuecking, director of Urgewald.
“This is the decisive decade and we will all pay the price if financial institutions don’t rapidly consign coal financing and investing to the history books. Adopting a robust coal policy must become the top priority of any financial institution that has pledged to achieve carbon neutrality by 2050” says Lucie Pinson, director of Reclaim Finance.
“Financiers must stop waffling about climate and start insisting that all companies they support implement robust coal phase-out plans. These must ensure that most of the world’s coal power plants and mines are shut down by 2030, that plant closures are actual closures and not just conversions to fossil gas or biomass, and that funds are set aside for just transitions for workers and communities” says Paddy McCully, senior energy analyst at Reclaim Finance.