European banks have helped prop up some of the continent’s biggest coal-burning polluters with billions of euros in loans despite their own public policies, a new study has claimed.
Since a landmark 2018 report by the UN’s Intergovernmental Panel on Climate Change warned that internationally agreed Paris goals would be missed by a wide margin, UniCredit, BNP Paribas, Barclays and Société Générale have lent €7.9bn to the eight highest-emitting coal consumers, according to the research.
In some cases lenders have committed funds after making public commitments to step away from the coal industry, the data compiled by environmental lobby group Europe Beyond Coal show.
The findings come at an awkward time for banks, which are facing pressure over their role in supporting the fossil fuel industry as activists switch their focus from shareholders to lenders.
“More than a year after UN climate scientists raised alarm bells about the climate crisis and the need for Europe to be coal-free by 2030, European banks continue to bankroll the ailing European coal industry to the tune of billions, which is inexcusable,” said Jeanne Martin, senior campaign manager at ShareAction, a partner in Europe Beyond Coal.
“It seems like European banks are falling at the first hurdle on climate action — phasing out coal financing. Banks cannot afford to lose precious time debating the how, what and why of the end of the coal age when there is so much at stake including financial and environmental stability.”
Europe Beyond Coal found that eight companies produced more than 50 per cent of coal-related carbon dioxide emissions in the EU last year: RWE and Uniper of Germany, PGE of Poland, EPH and CEZ Group of Czech Republic, Enel of Italy, Endesa of Spain and Fortum of Finland.
UniCredit, Italy’s biggest lender, was the most exposed to the eight groups, providing €2.8bn of loans and underwriting between October 2018 and December 2019. In November 2019 the bank announced it would halt lending to thermal coal projects by 2023, but subsequently agreed loans with EPH and Enel.
BNP made the second-biggest commitment, lending and underwriting €2.1bn. France’s biggest lender by assets said the transactions predated its announcement this month that it would reduce its exposure to thermal coal in the EU by 2030.
“In line with its coal-fired power generation policy, BNP Paribas will no longer finance players who develop additional coal capacity or those that do not have a coal exit plan by the indicated dates,” the company said.
Europe Beyond Coal identified €1.7bn of loans by Barclays, which faced shareholder pressure at the start of the year for its role in financing the fossil fuel industry, to five of the eight coal companies. The bank said the deals predated its current position.
“These claims are out of date and based on flawed assumptions,” Barclays said. “We are committed to the reduction of any thermal coal financing in line with the Paris goals and will not support project finance for the development of greenfield thermal coal mines, nor the construction or expansion of coal-fired power stations anywhere in the world.”
SocGen provided €1.3bn of loans to the coal companies, including a handful after it committed last July to exit the thermal coal sector by 2030. The Paris-based bank has since updated its exclusion policy on thermal coal.
UniCredit and SocGen did not immediately respond to requests for comment.
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