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Despite the ongoing ESG push, institutional investors around the world held as of the end of January 2021 as much as US$1.03 trillion in companies operating in the thermal coal value chain, a group of NGOs, including Urgewald, said in a recent report.
U.S. investors hold the largest share, 58 percent, of the world’s institutional investments in the coal industry, Japanese banks are the top lenders to coal businesses, while Chinese banks are the top underwriters, according to the report, which analyzes financial flows to all 934 companies operating in the thermal coal value chain.
The world’s largest institutional investor in the coal industry is U.S. Vanguard with holdings of almost US$86 billion, closely followed by BlackRock, which holds investments of over US$84 billion in the coal industry, said the report published by Urgewald, Reclaim Finance, Rainforest Action Network, 350.org Japan, and 25 other NGOs.
The biggest lenders to the coal industry are Japanese banks Mizuho with US$22 billion in loans provided in the past two years, Sumitomo Mitsui Banking Corporation with US$21 billion, and Mitsubishi UFJ Financial Group with US$18 billion. Those are followed by Citigroup with US$13.5 billion loans and Barclays with US$13.4 billion, according to Urgewald’s research which identified 381 commercial banks that provided loans totaling US$315 billion to the coal industry over the past 2 years.
Japanese banks are the top lenders to coal, followed by the U.S. banks and UK lenders, the research says.
The biggest underwriters to the coal industry are Chinese banks, followed by U.S. banks, Japanese banks, Indian banks, and UK banks. Chinese and Indian banks almost exclusively underwrite bond and share issues of coal companies from their respective countries, while U.S., Japanese and UK banks provide underwriting services to coal companies all over the world, the report said.
“Vague net zero announcements for 2050 - an entire generation into the future - are masking financial institutions’ refusal to take decisive action now. The bulk of coal financing and investment must be ended before 2030. This is the decade that counts,” said Paddy McCully, Climate and Energy Program Director at Rainforest Action Network.
Top Wall Street banks are also backers of the oil and gas industry through lending and advisory and brokering services.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.