Groups monitor coal investment

Sierra Club releases coal finance report card

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  San Francisco, CA – April 29: Today, Rainforest Action Network (RAN) and Sierra Club released their fourth annual coal report card, called “Extreme Investments: Coal Finance Report Card 2013.” The report evaluates the ten largest U.S. banks based on their financing of coal, the leading contributor to climate disruption. It ranks Bank of America, Citigroup and JPMorgan Chase as the top three financiers of the “worst of the worst” companies, including the operators of coal-fired power plants and mountaintop removal coal mines.

Findings in the report show an 11 percent decline in the usage of coal-fired power generation in the past two years and an approximate $9 billion dollar drop in investments from the three largest banks (BofA, Citi & Chase) from 2011 to 2012. However, the report also finds that all ten banks still maintain considerable investments, an estimated $20.8 billion in 2012.

"As the costs of climate disruption for our communities and future generations mount, U.S. banks continue to finance tens of billion dollars for companies that are mining and burning coal we can no longer afford to burn," said Ben Collins, research and policy campaigner for Rainforest Action Network's Energy and Finance program. "Banks must take clear, measurable steps to address the impacts of their coal financing.”

A growing body of environmental and public health literature has documented the staggering environmental and human costs of coal. For example, a 2011 Harvard School of Public Health study found that coal mining and power generation in the U.S. imposes between a third to over a half of a trillion dollars in environmental and health costs each year. These costs hit American families hard and range from asthma and other cardiovascular diseases caused by coal plant emissions to cancer and chronic disease in communities impacted by mountaintop removal coal mines.

“Mountaintop removal coal mining brings destruction, health problems and human rights violations to the people of Appalachia,” said Mark Kresowick, a policy analyst for the Sierra Club. “Operations like those at Arch Coal and Alpha Natural Resources are awful investments for the American banking industry. In fact, shares of companies with MTR mines lost an average of 40% of their value between April 2012 and April 2013 and only one of the 13 largest MTR companies had an S&P rating above ‘junk.’ It’s time for our banks to invest in smart, clean alternatives that don’t risk our health or the health of our economy.”

Once grades are determined, the groups present their findings to banks and offer an opportunity to provide further information that might affect the preliminary grades received. Five banks (Citigroup, Goldman Sachs, HSBC, U.S. Bank, and Wells Fargo) responded with clarifying information.  Unlike other banks, Wells Fargo presented substantive improvements to in its mountaintop removal lending practices in 2012, resulting in a “C” grade.

 

The report points out that while many of the banks have adopted environmental policies and due diligence processes, these have had little measurable effect on financing practices of the most polluting coal companies. The authors make note that next year, “more stringent, performance-based grading criteria will be phased in for the 2014 report card.”

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