$1 Trillion Still Invested in Coal Despite Climate Pledges

In the face of a growing global push for carbon neutrality, institutional investors still have not ditched “dirty” thermal coal.

Institutional investors have maintained more than $1 trillion worth of investments in the thermal coal industry despite the sector’s significant contribution to climate change and green commitments from many top investors.

New research from 25 climate groups including 350.org Japan, Rainforest Action Network, Reclaim Finance and Urgewald discovered that around $1.03 trillion was invested in the thermal coal sector by the end of last year across 4,500 institutional investors.

Of the funding, 60% came from US-based organisations, with BlackRock and Vanguard alone making up 17%. Researchers described the two asset management companies as “in a class of their own” on coal investment.

Looking into the banking industry, researchers found that 381 banks have lent a total of $315 billion to the coal industry in the past two years, with commercial banks also helping the sector to raise more than $800 billion on share sales and bond issues.

The three most significant coal lenders were based in Japan, but Citigroup and Barclays ranked as fourth- and fifth-biggest respectively. Both banks have lent over $13 billion to companies involved in the coal industry.

Researchers concluded that the actions of major banks and asset managers were not in line with the goals set out by the 2015 Paris Agreement, where leaders agreed to take action to limit global temperature increases to 2°C this century. Part of the agreement involved cutting back fossil fuels, including coal – and especially thermal coal, which is one of the worst fuel sources for climate change.

Paddy McCully, Rainforest Action Network’s climate and energy program director, described Wall Street as “a huge driver of climate pollution around the world” and identified its coal industry investments as driving the planet deeper into its climate crisis.

“Vague net zero announcements for 2050 – an entire generation into the future – are masking financial institutions’ refusal to take decisive action now,” he said.

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