Analysing the quality of coal policies : The Coal Policy Tool
Navigating the “policy jungle” is not easy. Reclaim Finance has therefore developed an online tool that provides a comprehensive analysis of all coal policies issued by French financial institutions.
The tool compares and ranks all policies on the basis of consistent and transparent criteria. Its aim is to enable clients, media and stakeholders of financial institutions to easily understand the essentials of each policy and provide an answer to the key question: Will this policy help us stay within the 1.5°C limit?
Policies are evaluated based on 5 criteria, the logic of which is explained here.
To find out the explanation of each of the scores and our analysis, click on the name of the financial institution!
NA The criterion does not apply to this type of financial institution.
The analysis grid
The first criteria covers the exclusion of coal mines, coal plants and coal infrastructure.
| Grade | Coal projects |
|---|---|
| 0 | No policy |
| 1 | Very weak exclusion of new coal plants and/or mountaintop removal (MTR) exclusion only |
| 2 | Exclusion of all non USC plants or OECD guidelines, or all new plants in developed countries |
| 3 | Exclusion of all new thermal coal mines OR Exclusion of all new coal plants in developed countries + all non ultra-supercritical (USC) everywhere (+ optional some restrictions for coal mines) |
| 4 | Exclusion of all new thermal coal mines + all new coal plants in developed countries or all non USC plants worldwide OR Exclusion of all new coal plants but exceptions |
| 5 | Exclusion of all new thermal coal mines + all new coal plants in developed countries + all non USC plants elsewhere OR Exclusion of all new coal plants |
| 6 | Full exclusion of new thermal coal mines and plants but potentially large exceptions |
| 7 | Full exclusion of new thermal coal mines and plants but minimal exceptions |
| 8 | Full exclusion of new thermal coal mines and plants with CCS exception |
| 9 | Full exclusion of new coal mines and plants without CCS exception and a/ for banks existing projects retrofit extending the life of the plant ; b/ for insurers, stand-alone / facultative coverage for existing projects and exclusion criteria for packages |
| 10 | Full exclusion of coal mines, plants and infrastructures |
The second criteria addresses the exclusion of all financial services to companies planning new coal mines, coal plants or coal infrastructure projects.
| Grade | Coal developers |
|---|---|
| 0 | No exclusion of companies because of coal development plans |
| 1 | Exclusion only of new clients regardless of the threshold on coal mining and/or coal power |
| 2 | Diversification plans are considered but no explicit exclusion linked to coal development |
| 3 | Weak exclusion of some companies planning new coal projects or coupled with another criteria |
| 4 | Exclusion of companies listed in urgewald 120 CPDL |
| 5 | Exclusion of companies planning the construction of more than 1000 MW of new coal power capacity |
| 6 | Exclusion of companies planning the construction of more than 500 MW of new coal power capacity |
| 7 | Exclusion of companies planning the construction or building new coal plants |
| 8 | Exclusion of companies planning the construction or building new coal mines/plants |
| 9 | Exclusion of companies planning the construction or building new coal mines/plants/infrastructures |
| 10 | Exclusion of companies developing their coal capacity (because of construction plans of new coal mines/plants/infrastructures ; purchase of existing coal assets without clear commitment to close it or selling equipments for new coal projects). |
Malus of minus 1 when existing clients asked to reach the threshold
Malus of minus 1 when minimal exceptions, minus 2 when large exceptions
Malus of 1 when policy not applied to all assets / all financial services
Malus of 1 when bonds are not sold or when it only concerns new coverage/investments
Maluses do not apply below score 1
The third criteria covers the exclusion of companies, which are most exposed to the coal sector, based on their share of revenues or electricity production from coal.
| Grade | Coal relative thresholds |
|---|---|
| 0 | No exclusion of companies because of their relative exposure to coal |
| 1 | Exclusion only of new clients regardless of the threshold on coal mining and/or coal power |
| 2 | Some exclusion for existing clients but only on coal mining or on coal power |
| 3 | Weak exclusion for existing clients for both coal mining and coal power companies |
| 4 | Exclusion of companies > 50 % coal share of revenues (csr) / coal share of power production (cspp) |
| 5 | Exclusion of companies > 45 % csr / cspp |
| 6 | Exclusion of companies > 40% csr / cspp |
| 7 | Exclusion of companies > 35% csr / cspp |
| 8 | Exclusion of companies > 30% csr / cspp |
| 9 | Exclusion of companies > 25% csr / cspp |
| 10 | Exclusion of companies > 20% csr / cspp |
Malus of minus 1 when existing clients asked to reach the threshold
Malus of minus 1 when minimal exceptions, minus 2 when large exceptions
Malus of 1 when not applied to all assets / all financial services
Malus of 1 when bonds are not sold or when it only concerns new coverage/investments
Malus when wrong metric used for coal power from 20%: minus 1 for revenues and capacity instead of power generation
Maluses do not apply below score 1
The fourth criteria covers the exclusion of the largest coal producers and largest coal plant operators.
| Grade | Coal absolute thresholds |
|---|---|
| 0 | No exclusion of companies because of their absolute exposure to coal |
| 1 | Exclusion only of new clients regardless of the threshold on coal mining and/or coal power |
| 2 | Exclusion of some companies based on some absolute criteria |
| 3 | Exclusion of mining companies producing more than 100 MT coal a year |
| 4 | Exclusion of mining companies producing more than 50 MT coal a year |
| 5 | Exclusion of mining companies producing at least 20 MT coal a year ; or any lower exclusion threshold for mining companies but no exclusion of power companies |
| 6 | Exclusion of mining companies > 20 MT and some power companies based on some absolute criteria |
| 7 | Exclusion of mining companies > 20 MT and power companies > 15 GW |
| 8 | Exclusion of mining companies > 20 MT and power companies > 10 GW |
| 9 | Exclusion of mining companies > 15 MT and power companies > 5 GW |
| 10 | Exclusion of mining companies > 10 MT and power companies > 5 GW |
Malus of minus 1 when existing clients asked to reach the threshold
Malus of minus 1 when minimal exceptions, minus 2 when large exceptions
Malus of 1 when not applied to all assets / all financial services
Malus of 1 when bonds are not sold or when it only concerns new coverage/investments
Maluses do not apply below score 1
The fifth criteria relates to the quality of the coal phase-out strategy.
| Grade | Coal phase-out |
|---|---|
| 0 | Has not announced a coal phase-out |
| 1 | Has announced its intention to phase out coal with no deadline for coal mining and/or coal power |
| 2 | Has announced a global coal phase-out by 2050 for coal mining or coal power |
| 3 | Has announced a global coal phase-out by 2050 for coal mining or coal power ; exclusion of some coal developers OR Has announced a global coal phase-out by 2050 for coal mining and coal power OR Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining or coal power |
| 4 | Has announced a global coal phase out by 2050 with the intermediary date of 2030 for EU/OECD, or a global coal phase-out by 2040, for coal mining and coal power OR Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal power ; exclusion of some coal developers |
| 5 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal power ; exclusion of all coal plant developers OR Has announced a global coal phase out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power |
| 6 | Has announced a global coal phase-out by 2050 with the intermediary date of 2030 for EU/OECD, or a global coal phase-out by 2040, for coal mining and coal power ; exclusion of some coal developers ; at least one of these 2 elements: – demand of an exit plan – decrease of exclusion threshold over time OR Has announced a global coal phase out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power ; exclusion of some coal developers |
| 7 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power ; at least 2 out of these 3 elements: – exclusion of some coal developers – demand of an exit plan – decrease of exclusion threshold over time OR Has adopted very restrictive exclusion criteria that imply an almost immediate full coal mining and coal power phase-out |
| 8 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power ; exclusion of coal mine developers and coal plant developers OR Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power ; exclusion of all coal plant developers ; at least 1 out of these 2 elements: – demand of an exit plan – decrease of exclusion threshold over time |
| 9 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power ; exclusion of all coal developers ; demand of an exit plan OR Has adopted a total exclusion criteria that imply an immediate full coal mining and coal power phase-out, but no exclusion of all coal developers |
| 10 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for EU/OECD for coal mining and coal power ; exclusion of all coal developers; demand of a closure plan and exclusion process if companies fail to adopt a closure plan OR decrease of exclusion threshold over time |
Malus of 2 if phase-out commitment only covering lending not underwriting
Malus of 2 if phase-out commitment linked to a government commitment
Malus of 1 if phase-out commitment apply only to new financing/coverage and not existing financing/coverage
Malus of 2 if commitment only applies to financed companies and not to the financial player itself
Malus of 2 if financing of new coal mine or plant projects is still possible
Maluses do not apply below score 1
A “phase-out” strategy qualifies in this assessment if the end goal is a maximum 5% exclusion threshold
Read more about the methodology and the rationale behind each of the 5 criteria.
All financial institutions were contacted and had an opportunity to comment on their ratings before publication.
Did you identify a mistake? A financial player is missing? Feel free to contact us: yann@reclaimfinance.org.
With the support of
