Banks and insurers are more frequently adding coal exclusion policies to their investments while those with existing policies are toughening them up despite record profits in the sector, according to a report on Thursday.
More than 200 financial institutions globally have policies restricting coal investment, double the number seen in April 2019, suggesting climate action is gathering steam, according to the Institute for Energy Economics and Financial Analysis (IEEFA).
IEEFA reviewed the formal coal exit policies of financial institutions including commercial banks, global asset managers, insurance and reinsurance companies, pension funds, central banks, development lenders and others.
The increase in restrictions comes amid record profits at coal miners over the past year, partly driven by the policies that have curbed available capital for new projects, increasing regulation, as well as by the war in Ukraine.
Asia has shown a big increase in the number of financial institutions barring coal, climbing to 41 from 10 across 2013-2019. European lenders and insurers meanwhile are setting down stricter policies than those in other regions, IEEFA said.
Most financial institutions restrict investments in coal-fired power plants and thermal coal mining, however increasingly tougher restrictions target all financial services and products.
Tougher restrictions relate to corporate finance, project finance, underwriting and investment but also extend to wider coal activities such as coal gasification, super-critical coal power plants, and coal for rail and port infrastructure, IEEFA said. (Reuters)