2024 saw six new banks committing to end finance for metallurgical coal, and an explosion in commitments to decarbonise steel portfolios
The success
According to Reclaim Finance’s Coal Policy Tool, 11 commercial banks now have policies to restrict or end finance for metallurgical coal. According to a Reclaim Finance report published in November 2023, just five banks – HSBC, Société Générale, Westpac, BNP Paribas, and CaixaBank – had policies in place at that time. Since then, six banks – La Banque Postale, Crédit Agricole, ING, Lloyds Bank, NAB, and Macquarie – have also adopted such policies. While many of these policies are insufficient to halt finance from flowing into new coal mines, limiting finance for metallurgical coal is a step in the right direction.
Additionally, according to BankTrack’s Iron and Steel Target Tracker, 43 banks now have an iron and steel decarbonisation target set under the NZBA. In August 2023, just 16 had targets. This can be viewed as a positive trend in banks committing to steel decarbonisation. However, emissions reduction targets for bank lending must be coupled with strong policies that phase out finance for steel companies who invest in coal-based steelmaking expansion.
BankTrack's role
BankTrack has been advocating for an end to bank finance for coal-based steel production since the launch of our Banks and Steel project in February 2023. We publicly challenged banks to make their steel-sector climate commitments more ambitious, and provided recommendations for strong policies in line with the IEA’s Net-zero by 2050 scenario. In December 2023, together with Reclaim Finance and 67 organisations, we sent letters to the 50 largest banks financing metallurgical coal expansion, calling on them to adopt a metallurgical coal exclusion policy.