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Banking on Climate Change 2020 - Coal mining. Photo: Rainforest Action Network (RAN)Go directly to: coal mining policy table or coal mining exclusion table
Coal is a carbon-rich, highly energy-dense black rock which mankind has mined at scale since the middle of the 19th century, when it powered the industrial revolution. Electricity produced by coal has the highest climate impact of all types of fossil fuels. A distinction is often made between thermal coal (or steam coal), which is used to produce electricity, and metallurgical coal (or coking coal), which is burned at a high temperature to make steel. Unlike oil and gas, where a well needs to be drilled for extraction, coal can often be mined from the surface or the shallow subsurface. Therefore, coal mines have a particularly high impact on the landscape, vegetation, (ground)water and health of the local population. Downstream regions are often polluted with sulphuric acid and a whole range of heavy metals and toxins. Two types of coal mining with a particular heavy impact on the environment are mountaintop removal mining, which involves the removal of mountaintops to expose coal seams, and open pit lignite (or brown coal) mining, which creates mines that are many kilometres in diameter and has higher emissions per unit of energy generated.
While coal and coal mining has been on the decline in the US and Europe for the last decade, many new coal mines and coal power plants are being planned and constructed in Asia, Africa and South America.
The severity of the climate crisis requires that banks must urgently take steps to disengage from financing all business activities and projects that continue the world's reliance on fossil fuels. Banks must therefore end support for all new coal mining projects and implement a full phase-out for financing coal mining projects in line with the Paris climate agreement.
The world’s four biggest financiers of coal mining are all Chinese banks, with China Construction Bank being the biggest, financing coal mining to the tune of USD 13 billion since the signing of the Paris climate agreement (2016-2019). Number two to four are Bank of China, ICBC and Agricultural Bank of China.
Coal power and coal mining have been the most opposed type of fossil fuel by NGOs, local communities and many governments. During the last decade, many banks have implemented restrictions on financing coal mining, infrastructure and power plants. Bank policies on coal mining are scored below. These scores were originally published in our Banking on Climate Change 2020 report, and any policy changes implemented since then have been assessed using the same methodology. The details section in the table contains further detail on the exact scoring per bank, as well as an overview of relevant policies.
See here for banks' exposure to the coal mining sector in 2016-2019.
The point-based policy ranking assesses bank policies in four ways:
1) Restriction on direct financing for coal mining projects.
2) Restriction on financing for companies that expand coal mining.
3) The bank’s commitment to phase-out financing for coal mining.
4) The bank’s commitment to exclude companies active in coal mining above a certain threshold.
A bank can obtain a total of 32 policy points for its coal mining policy. Based on this score banks are then classified as laggards (0-8 points), followers (8.5-16 points), front runners (16.5-24 points) or leaders (24.5-32 points).
A number of banks have already taken steps to fully or partially exclude coal mining or companies involved in coal mining operations from their investments. The table below lists banks that have taken such steps.
This table lists banks that have adopted a full ( ) or partial ( ) exclusion policy for coal mining projects and/or companies. Click on 'Details' for the rationale of this assessment for each bank.
See the Coal Policy Tool from Reclaim Finance for a more in-depth analysis of coal policies from banks (and other financial institutions).
Our policy assessments are always a work in progress and we very much welcome any feedback, especially from banks included in them. You can of course also contact us for more information on specific scores and the latest policy changes. Please get in touch at climate@banktrack.org.
