Ginny Cleaveland, Deputy Press Secretary, Fossil-Free Finance, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
NEW YORK — A new report by the Sierra Club’s Fossil-Free Finance campaign reveals that major global banks are propping up deadly coal plants across the US by financing the parent companies that own them. This financing comes despite the fact that many banks have climate commitments that restrict them from providing project-level loans to coal plants. The analysis reveals a massive loophole in the banks’ climate commitments through their continued lending and underwriting for companies operating deadly coal-fired power plants in the United States.
- Read the report: Lethal Investments: The Health Consequences of Cash Flows into Coal
The analysis follows the release of the Sierra Club’s Out of Control report, which revealed there are approximately 3,800 premature deaths annually from soot released by US coal plants with no firm retirement plans prior to the end of the decade. By financing the parent companies of these coal utilities, major global banks are channeling billions of dollars into the very companies responsible for keeping these deadly coal plants operational and poisoning nearby communities with toxic air pollution.
“Despite their high-profile climate pledges, major banks like Barclays and Citi are continuing to funnel billions of dollars into deadly coal plants. With their flimsy financing policies and half-finished net zero targets, these banks have left billions of dollars on the table for major polluters to continue to operate and even expand the coal plants killing thousands of people in the United States every year,” said Adele Shraiman, Senior Campaign Strategist, Fossil-Free Finance, Sierra Club. “Experts have repeatedly warned that fossil fuel expansion will make it impossible to meet our global climate goals, and coal power is the worst of the bunch. By continuing to pour money into coal, these banks are telling their shareholders, clients, and regulators they aren’t serious about meeting their own climate commitments.”
TOPLINES FROM THE REPORT
The report reveals that since 2016, major global banks have poured $166 billion into 10 of the most deadly publicly traded and federally owned coal utility parent companies in the US: Tennessee Valley Authority (TVA), PPL Corporation, Berkshire Hathaway Energy, Ameren Corporation, Vistra Corporation, FirstEnergy Corporation, Duke Energy Corporation, NRG Energy Inc, American Electric Power, and The Southern Company. These 10 coal utility parent companies operate coal plants in 16 states with no firm plans to close by 2030. Each year, the coal plants owned by these 10 companies cause an additional 1,719 premature deaths from air pollution exposure.
Six major banks — Barclays, JP Morgan Chase, Bank of America, Citi, Wells Fargo, and Mitsubishi UFJ (MUFG) — make up 50%, or $83.8 billion, of the total financing provided to these 10 coal utility parent companies since 2016. Other banks that round out the top 10 include Mizuho, Goldman Sachs, RBC, and Credit Suisse.
Barclays and the five US banks are all signatories of banking industry pledges to reach net zero by 2050 by reducing their greenhouse gas (GHG) emissions from their financing activities. When it comes to providing financing to the coal sector, most banks won’t directly offer funds specifically for coal plants (project-level financing). However, banks freely lend to the coal utility parent companies (corporate-level financing), which allows them to operate those coal plants. Of the top 6 banks in the report, only Barclays has a policy that prohibits corporate-level financing to some companies operating coal plants, either through general purpose loans or underwriting the sale of bonds or shares. However, even Barclays’ policy makes several exceptions, which still allow financing for companies developing coal power.
The Sierra Club is calling on banks to expand their climate commitments to include additional restrictions on corporate-level lending and underwriting services to utility companies prolonging the use of coal in the power sector.
QUOTES FROM STATES
“Our planet can’t afford the billions of dollars funneled into dirty, deadly fossil fuels. Berkshire Hathaway Energy continues to poison and pollute our communities with their burning of fossil fuels. MidAmerican Energy, one of its subsidiaries, is the largest carbon polluter in Iowa. When clean energy alternatives are more affordable and reliable than ever, there’s simply no excuse to finance coal plants that play a significant role in serious public health issues,” said Emma Colman, Organizing Representative, Iowa Sierra Club.
"Bank financing enables monopoly utilities like Ameren to pursue climate-wrecking projects that pollute our air and water — all while insurance companies quietly retreat from covering homeowners in coastal areas because of a quickly changing climate. We need investments in renewable energy, efficiency, and storage, not new investments to prop up coal plants or build new gas power plants," said Jenn DeRose, Campaign Representative, Missouri Sierra Club.
“In Utah, Berkshire Hathaway owns the Hunter and Huntington coal plants, some of the worst polluters in the West. These coal plants significantly impact public health, contributing to increased asthma attacks, hospital visits, and even premature death. Berkshire Hathaway and other major banks are financing the poisoning of our communities, and these investments are increasingly threatening our ability to breathe clean air,” said Hunter Warren, Volunteer with Sierra Club’s Utah Needs Clean Energy group.
“Just last summer, environmental advocates united in Jackson Hole for its annual banking conference to call on the Federal Reserve to shift away from fossil fuels, and to stop the destructive funding that keep coal plants like the Berkshire Hathaway-owned Jim Bridger coal plant — the nation's third largest source of haze pollution that continues to be able to side-step pollution reduction measures — in operation. The investments made to utilities that prolong the livelihoods of dirty coal plants carry significant public health concerns that make all the difference in whether our communities can enjoy the outdoors safely," said Anna Kerr, member, Sunrise Movement Jackson Hole.
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About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.