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Best practices in bank energy policies

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This page details some examples of current ‘best practice' among public and private banks' energy sector sustainability policies, as of October 2015. It is important to note that these 'best practices' still fall a long way short of BankTrack's demands.

SCOPE

Most recent sector policies from international banks cover all financial services offered by the institutions in question, so it's not only project finance and also includes, for example, corporate lending, the underwriting of shares and bonds, asset management as well as advisory work. This is for instance the case with HSBC's Energy Sector Policy which covers "all lending and other forms of financial assistance, debt and equity capital markets activities, project finance and advisory work".

COAL

The best practice for a major coal bank, and which is yet to be seen, would be to have signed up to the Paris Pledge and thereby committed to fully phase out its involvement in coal mining and coal power activities. The Paris Pledge is a campaign launched by BankTrack in the summer of 2015 in the lead up to the Paris COP21 climate conference, and is ongoing.

COAL POWER

Natixis announced in October 2015 that it is to cease financing for any thermal coal mine and coal fired power plant project finance worldwide, including new advisory or arrangement mandates. It will also not finance companies whose business is over 50% reliant on operating coal-fired power plants or thermal coal mines.

Crédit Agricole announced in September 2015 that it will incorporate new criteria in its CSR Sector Policy on Coal-fired power plants, including "not to finance any new coal-fired power stations or their extensions in high-income countries as defined by the World Bank". This new measure will come into force before COP21 gets under way.

The new "Directions for the World Bank Group's Energy Sector" adopted in 2013 state that "the World Bank Group will provide financial support for greenfield coal power generation projects only in rare circumstances".

The new European Investment Bank Emission Performance Standard also adopted in 2013 restricts its involvement in all new energy generation projects (including new coal power plants) to investments emitting less than 550g CO2/kWh.

The Nordic Investment Bank's Sustainability Policy adopted in 2012 includes on its exclusion list: "New base load power plants with an installed capacity above 50 MW (e + th) mainly fuelled with coal or fuels with a similar fossil carbon dioxide intensity".

COAL MINING

Natixis announced in October 2015 that it is to cease financing for any thermal coal mine and coal fired power plant project finance worldwide, including new advisory or arrangement mandates. It will also not finance companies whose business is over 50% reliant on operating coal-fired power plants or thermal coal mines.

Crédit Agricole announced in May 2015 that it will "no longer finance coal mining projects or companies specialised in this field", which was integrated in its updated CSR Mining Sector Policy.

Citi adopted in October 2015 an updated Environmental and Social Policy Framework where it "commits to continue this trend of reducing our global credit exposure to coal mining companies ".

It followed Bank of America which adopted in May 2015 an updated Coal Policy where it commits to "continue to reduce our credit exposure to coal extraction companies".

On Mountaintop Removal, the following banks now have policies including the exclusion of the main MTR producers:

TAR SANDS

Rabobank's position on Oil & Gas activities states that "Rabobank Group does not provide finance that will be used to extract unconventional fossil fuels (oil sands, oil shales)."

ABN AMRO's Energy Policy adopted in 2014 states that "the bank will not finance Tar sand exploration".

ARCTIC DRILLING

ABN AMRO's Energy Policy adopted in 2014 states that "the bank will not finance Energy sector activities in the Arctic region".

SHALE GAS

Rabobank's policy states that "Rabobank Group does not provide finance that will be used to extract unconventional fossil fuels (oil sands, oil shales)."

NUCLEAR

Triodos Bank's position paper states: "Triodos Bank does not invest in companies with involvement in the nuclear industry. Instead, it focuses on energy efficiency measures and renewable energy technologies as an alternative to both diminishing fossil fuels and nuclear power."

The European Bank for Reconstruction and Development in its energy policy from 2006 rules out financing of new reactors, an approach which was confirmed with the adoption of its new Energy Strategy in 2013.

"Coal-fired power stations are death factories. Close them." James Hansen

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