BANKS DODGY DEALS CAMPAIGNS
About BankTrack
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
History
BankTrack in the media
Our privacy policy
Donate
2023-03-17 00:00:00
Briefing: The role of financial institutions in decarbonising the steel sector
2023-03-09 00:00:00
Dutch bank ING supports controversial pipeline to import gas from authoritarian Azerbaijan
2023-02-23 00:00:00
Financial institutions need to address steelmaking’s coal addiction
2023-02-07 00:00:00
What COP15 means for banks: meeting the Global Biodiversity Framework requires protecting Indigenous rights and divesting from harmful industries
2023-03-20 08:50:41
Who dares to finance Eni and Exxon’s dangerous Rovuma gas plans in Mozambique?
2023-03-14 14:59:00
New ING policy could spark bank shift away from financing oil and gas infrastructure
2023-02-24 13:46:14
Pego power station conversion plans halted
2022-12-14 11:08:26
HSBC announces it will no longer finance new oil and gas fields
Connect
2022-11-22 00:00:00
Banking on Thin Ice: Two years in the heat
2022-11-17 00:00:00
BankTrack Global Human Rights Benchmark 2022
2022-10-21 00:00:00
Burning forests in the name of clean energy? How banks are failing to exclude the harmful wood biomass industry from finance
2022-06-28 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 3
2022-04-05 00:00:00
The BankTrack Human Rights Benchmark Asia
2022-03-30 00:00:00
Banking on Climate Chaos 2022
See all publications
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Banks and Pandemics
Our projects
Tracking the NZBA
Banks and Putin's war in Ukraine
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances History BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Login
Home › BankTrack blog ›
BankTrack News

Powering past coal? Top UK banks are passing the buck

2018-05-24
By: BankTrack
Contact:

Greig Aitken and Yann Louvel

Vietnamese campaigners react to HSBC's new coal policy announcement: "HSBC, we don't want your coal money".
2018-05-24
By: BankTrack
Contact:

Greig Aitken and Yann Louvel

With the Brexit saga rumbling on in the UK, if there’s one thing that can be said about the recently concluded UK bank AGM season it’s that Barclays, HSBC and Standard Chartered are pursuing their own particular form of isolationism from their European counterparts.

This relates to how the UK’s big three have been positioning themselves in recent weeks with regard to their continuing (alas, yes!) financing for coal power globally.

The coal power policy noises that have been emerging from Barclays, HSBC and Standard Chartered as they have prepared to meet with their shareholders reveal a widening gulf with many of their competitors. Fifteen international banks, including 12 big European banks, have now adopted a worldwide ban on project finance for coal power plant projects, reflective of the growing awareness across the finance sector, two and a half years after the inking of the Paris climate agreement, that coal investments have to be dumped, and quickly.

However, if concrete commitments are anything to go by, the message is not penetrating deeply enough in the City of London. This despite an early April warning from Mark Carney, the governor of the Bank of England, that climate change will likely have a “catastrophic impact” on the financial system unless firms do more to disclose their vulnerabilities. And the UK banks' stance is doubly disappointing given that the UK government is making the running with Canada in promoting the Powering Past Coal Alliance, a global, multi-stakeholder alliance committed to moving the world from burning coal to cleaner power sources. 

Let’s start by looking at the starkest missed opportunity unveiled by Barclays just before its AGM on May 1. As revealed by our Fossil Fuel Report Card 2018 data, between 2015 and 2017 Barclays increased its financing for coal power companies year on year, reaching $1.476 billion in 2017. The bank’s reaction to this black mark? Far too little, other than the publication – for the first time publicly in a sectoral policy – of how it plans to approach coal power financing going forward.

Barclays is intent, for now at least, on still potentially financing climate-busting, public health-depleting coal power projects in all developing countries. Bear in mind that it’s now two years since World Bank president Jim Yong Kim warned of south-east Asian coal power plans that “if the entire region implements the coal-based plans that are in existence right now, I think we are finished.”

Barclays’ new policy language speaks of developing “a strategic approach that is sustainable in the long-term” for its global energy client portfolio. It’s now paramount for the bank to rapidly revisit its approach to coal power, and seek to develop an approach that, in the short-term, is sustainable for the planet and for communities in the developing world which are facing new coal plant build-out.

Meanwhile, HSBC, despite extensive appeals and submissions from NGOs warning that the coal industry’s ‘coal power in the developing world is necessary for development’ mantra is baseless hyperbole, has managed to gain plaudits for ending its direct finance for coal power globally – though it is quite clearly not doing so.

The new HSBC approach to coal power finance sees the bank ready and willing to finance coal plant developer companies planning new plants in three potentially very big coal power markets: Vietnam, Indonesia and Bangladesh. According to the latest data from CoalSwarm, combined these three countries currently have coal power plant pipelines totalling close to 80 gigawatts, the equivalent of the current operating coal capacity of Germany and Poland combined, the two biggest European coal consumers and emitters. This is a potentially massive loophole which HSBC has chosen to leave open.

To have drawn a clear, ambitious policy line in the sand and withdraw from coal power in the developing world would appear, for one thing, to have been just too inconvenient for ongoing HSBC coal deals in Vietnam and Indonesia. Currently the bank is involved in four coal plant Dodgy Deals in these countries: in Vietnam, Long Phu I, where it is the global coordinator, and Vinh Tan 3, where it is financial advisor; in Indonesia, the Sumsel 9 and Sumsel 10 mine mouth projects, where HSBC is the financial advisor.

These four ongoing deals are bad enough, but baked into the HSBC policy is the possibility to close other deals over the next five years (up to 2023), an excessively great window when not a single new coal plant deal should now see the light of day given the climate and health urgencies. And all this when there have recently been some clear indications emerging from the governments of Vietnam and Indonesia that they will most probably not attempt to build all of the coal power projects that have cluttered their national power plans for years.

If there is a rush now to build as much as they can in short order over the coming years, rather than starting to tap into abundant renewables potential (in Indonesia, in Vietnam and in Bangladesh), then HSBC’s policy signalling will have a lot to answer for.

Which leaves us with the big unknown for now: is the ongoing review of Standard Chartered’s approach to coal power financing, thought to be being finalised in the coming few weeks, going to see it doing ‘an HSBC’ and stay in coal financing in selected developing world countries?

The indications coming out of the bank’s AGM in London two weeks ago are that, despite a lot of new ‘sustainability’ mainstreaming taking place across its operations, it too is having its head turned by the ‘coal for development’ red herring, as well as certain pressure from governmental lobbying to help facilitate unpopular, controversial coal plant building in the coming few years across south-east Asia.  

One of the three pillars of the bank’s new sustainability philosophy is ‘Do the right thing’. Remaining in the direct financing of new coal plants, at this point in history, is assuredly not the right thing to do, when Standard Chartered should be grasping sustainability by the horns and persuading governments to turn to renewables, to make good on their Paris commitments, and provide them with the much sought after capital to achieve this.   

This weekend, as sponsors of LIverpool Football Club, Standard Chartered's brand will be on display to more than a billion people during the Champions League Final in Kiev. The bank should be channelling Liverpool's traditional hymn – and walking on out of coal, to give hope to the many communities who are resisting proposed coal plant projects throughout south-east Asia. 

Banks

Barclays

United Kingdom
Active

HSBC

United Kingdom
Active

Standard Chartered

United Kingdom
Active
Dodgy Deals
There are no active project profiles for this item now.

Long Phu I coal power plant

Vietnam
Project
On record
Coal Electric Power Generation

Long Phu I coal power plant

Vietnam

Vinh Tan III coal power plant

Vietnam
Project
On record
Coal Electric Power Generation

Vinh Tan III coal power plant

Vietnam
Sections
Banks Policies Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature Banks and Pandemics
Our projects
Tracking the NZBA Banks and Putin's war in Ukraine Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances History BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Tel: +31 24 324 9220
Contact@banktrack.org
Donate Mailing list Facebook Twitter
©2022 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted