Financial institutions are foot-dragging on financing coal phaseouts

The document highlights a gap between net zero commitments and the actual financing of coal phaseouts, noting that commercial banks provided US$470 billion to the coal industry between 2021 and 2023. It argues that internal bank policies and financed emission targets are not valid excuses for inaction, as institutions can create specific carve-outs for decommissioning. The author proposes a new "phaseout emissions" category to track support for coal retirements without penalizing overall portfolio targets and urges the public sector to lead pilot projects and provide concessional financing to demonstrate the viability of just coal phaseouts.

• To meet the 1.5°C target, coal power must be phased out by 2040, which requires the current pace of coal power asset retirements to increase by five times.
• Despite net zero pledges, global coal capacity saw its highest net increase since 2016 last year, with nearly 70 GW coming online, while commercial banks provided US$470 billion to the coal industry via loans and capital markets between 2021 and 2023.
• Some financial institutions, including the Glasgow Financial Alliance on Net Zero (GFANZ), claim that internal policies and financed emission targets prevent investment in early coal decommissioning; however, banks like HSBC and Standard Chartered have already implemented exceptions for the "early retirement of thermal coal assets."
• The author proposes creating a discrete "phaseout emissions" category to record emissions from coal retirement investments, suggesting the Coal Transition Accelerator initiative announced by the French government at COP28 as a potential body to codify this.
• Public sector intervention is required to break the investment logjam through the leadership of pilot projects, the provision of concessional financing and guarantees for de-risking, and the establishment of standards to ensure phaseouts are environmentally and socially just.

APA

Martin, L. (2024). Financial institutions are foot-dragging on financing coal phaseouts. Reclaim Finance. https://reclaimfinance.org/site/en/2024/05/28/financial-institutions-are-foot-dragging-on-financing-coal-phaseouts/

Chicago

Martin, Léo. Financial institutions are foot-dragging on financing coal phaseouts. Reclaim Finance, 2024. https://reclaimfinance.org/site/en/2024/05/28/financial-institutions-are-foot-dragging-on-financing-coal-phaseouts/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=Financial institutions are foot-dragging on financing coal phaseouts |publisher=Reclaim Finance |date=28 May 2024 |url=https://reclaimfinance.org/site/en/2024/05/28/financial-institutions-are-foot-dragging-on-financing-coal-phaseouts/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2024financial, author = {Martin, Léo}, title = {{Financial institutions are foot-dragging on financing coal phaseouts}}, publisher = {Reclaim Finance}, year = {2024}, month = may, url = {https://reclaimfinance.org/site/en/2024/05/28/financial-institutions-are-foot-dragging-on-financing-coal-phaseouts/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }