Institute for Energy Economics and Financial Analysis (IEEFA) has revealed over 100 major global financial institutions have introduced policies restricting coal funding.

In a report, Over 100 Global Financial Institutions Are Exiting Coal, With More to Come, IEEFA finds global capital is ‘fleeing the coal sector at an electrifying rate’. Since 2013, the research notes that coal exit announcements have occurred at a rate of over one per month from globally significant banks and insurers holding more than $10bn worth of assets under management.

The report also finds that since the start of 2018, there have been 33 new or significantly improved announcements from global financial institutions restricting coal. That’s one new announcement every two weeks.

The 100 financial institutions restricting coal lending includes 40 per cent of the top 40 global banks and as of last week, at least 20 globally significant insurers with more than $6tr of investments – 20 per cent of the industry’s global assets – who are excluding coal from their portfolios.

A further five policies have been announced since the beginning of 2019 with moves coming from Nedbank of South Africa, Barclays Bank UK, Export Development Canada, and Varma of Finland. The latest move announced just last week was from Austria’s VIG saying it will no longer insure new coal plants and mines.

Report author Tim Buckley, director of Energy Finance Studies, IEEFA, says when globally significant investors act, global momentum increases: “For environmental, reputational and financial reasons, thermal coal is a toxic asset for global investors increasingly announcing new and improved policies responding to climate change. The pattern of tightening existing policies combined with new lending restrictions is creating a domino effect within the global financial industry while resulting in a progressive strangulation of the thermal coal industry.”

Of the 33 coal restriction policies announced from 2018, 24 are new and nine build on earlier coal-related commitments. Notably, these restrictions are beginning to come from Asian financial institutions led by Dai-ichi Life of Japan and Sumitomo Mitsui Trust Bank, which are rapidly aligning with their European and US counterparts.

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