{"id":17372,"date":"2021-12-21T06:00:15","date_gmt":"2021-12-21T05:00:15","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=17372"},"modified":"2023-02-08T15:50:47","modified_gmt":"2023-02-08T14:50:47","slug":"lack-of-coal-exit-plans-poses-challenge-to-finances-engagement-strategy","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2021\/12\/21\/lack-of-coal-exit-plans-poses-challenge-to-finances-engagement-strategy\/","title":{"rendered":"Lack of coal exit plans poses challenge to finance\u2019s engagement strategy"},"content":{"rendered":"

Press Release<\/b><\/span><\/strong><\/p>\n

Paris, 21 December 2021 – New analysis from Reclaim Finance shows that <\/span>the vast majority of<\/span> coal companies are failing to plan for an exit from the sector, despite looming deadlines set by several of their financial backers (1). The findings pose a major challenge to the 30 leading banks and investors worldwide, including <\/span>Cr\u00e9dit Agricole<\/span> and BNP Paribas, who have demanded the companies present credible coal exit plans by the end of 2021, and comes shortly after the COP26 agreement to accelerate the transition away from coal. Reclaim Finance is calling <\/span>on financial institutions to <\/span>sanction<\/span> \u2018coal laggards\u2019 who fail to plan for a timely exit. <\/span><\/span> <\/span><\/b><\/span><\/strong><\/p>\n<\/div><\/div><\/div>

Examining the success<\/span> of engagement strategies, <\/span>Reclaim <\/span>Finance reviewed the coal exit plans of 47 companies in the sector<\/span> which have been subject to coal exit demands from their financial backers<\/span> (<\/span>2<\/span>)<\/span>, with plans requested by the end of 2021.<\/span> Shockingly, <\/span>45 (<\/span>94%<\/span>)<\/span> of <\/span>the <\/span>analyzed companies had no credible coal exit plan (<\/span>3<\/span>). Meanwhile, nearly one-third continue to develop new coal production capacity, and more than half do not intend to exit the coal se<\/span>ctor in line with the Paris Agreement (<\/span>4<\/span>). The remainder of the companies<\/span> simply shrug off their responsibilities by selling mines and plants on or <\/span>converting<\/span> them to other, non-sustainable energy sources like gas and biomass, instead of shutting them down definitively.<\/span><\/span><\/p>\n<\/div>

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Lucie Pinson, executive director of Reclaim Finance, said<\/span><\/span><\/strong>: <\/span>\u201c<\/span><\/span>Credible transition plans are all the rage, but our analysis reveals that <\/span>the <\/span>overwhelming<\/span> majority of<\/span> coal companies have no such thing<\/span>, with exit plans<\/span> either non-<\/span>existent<\/span>, or<\/span> strewn <\/span>with delays and<\/span> loopholes<\/span>. <\/span>For <\/span>the <\/span>banks and investors<\/span> backing them<\/span>, the choice is clear: <\/span>suspend services to companies failing to transition in line with the 1.5C <\/span>target or<\/span><\/em> be complicit in climate chaos<\/em>.<\/span><\/span>\u201d<\/span><\/span><\/p>\n<\/blockquote>\n<\/div>

The report examines\u00a0several case studies\u00a0of coal giants supported by the likes of BNP Paribas and\u00a0Cr\u00e9dit Agricole\u00a0despite inadequate exit plans,\u00a0from\u00a0Glencore\u00a0and\u00a0KEPCO\u2013 which are still expanding in the sector \u2013 to Enel, whose plans to exit coal by 2030 are undermined by its sale of some plants and conversion of others into fossil gas.\u00a0<\/span>\u00a0<\/span><\/p>\n

The results also challenge the efficacy of the engagement strategies which have gained currency in\u00a0financial circles\u00a0in recent months, voiced most prominently by BlackRock CEO Larry Fink.\u00a0Examining\u00a0the flagship investor engagement initiative Climate Action 100+ (CA100+), the report finds that four years after its launch, most of the CA100+\u2019s target companies \u2013 such as BHP, Fortum-Uniper\u00a0and Glencore\u00a0(5)\u2013\u00a0have failed to adopt significantly\u00a0better\u00a0coal phase-out plans than non-target companies.<\/span><\/p>\n<\/div>

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Guillaume Po<\/span><\/strong>ttier, stewardship campaigner at Reclaim Finance, concluded<\/strong>:<\/span><\/span> \u201c<\/span><\/span>This research unveils an unfortunate truth: <\/span>as things stand,<\/span> engagement <\/span>practices <\/span>are <\/span>just <\/span>not<\/span> working. <\/span>A<\/span> vanguard of financial institutions<\/span> might be<\/span> making demands <\/span>for phase-outs<\/span> of <\/span>coal companies, <\/span>but they are <\/span>failing comprehensively, due to<\/span> inade<\/span>q<\/span>uate timelines and a lack<\/span> of <\/span>sanctions<\/span>.<\/span> At best this <\/span>approach is ill-conceived, <\/span>at worst it represents straightforward greenwashing. Engaging polluting companies is an important tactic, but only when demands are robust and backed up with the threat of divestment<\/span><\/span><\/em>.<\/span><\/em>\u201d<\/span><\/span><\/p>\n<\/blockquote>\n<\/div><\/div><\/div><\/div><\/div>

Press contacts:<\/span><\/span><\/u><\/b><\/p>\n