Podcast Center
Video Center
Webcasts
Resource Center
Events
June 11, 2015 at 09:20 PM
Divestment in fossil fuels has been gradually increasing over the last several years, but its focus seems to have narrowed and perhaps reached critical mass in one area: coal.
Pressure is increasing from environmental groups, scientists concerned over global warming and investors, too. That’s particularly true considering the impending release of Pope Francis’s encyclical on climate change later this month, expected to exhort meaningful global action later this year at the December climate conference in Paris, and the conference itself, the stated purpose of which is to adopt a new agreement on climate change that will provide a protocol for countries to reduce emissions.
Whether the Paris conference succeeds in imposing binding requirements on countries across the globe remains to be seen, but that focus on coal is sharpening, and investors in energy had best keep abreast of its impact. Here’s a look at eight of the most visible recent forces working on the coal market.
1. Bank of America backs off from coal ventures.
At its May shareholder meeting, Bank of America said that it was cutting off financing for coal extraction projects.
The bank has previously been a major source of financing for coal ventures, so the move marks a major policy change. In fact, in reports Bank of America spokeswoman Laura Hunter was quoted saying that in addition to supporting carbon capture and storage measures, the bank would also work with clients, including mining companies, “that are diversifying to other fuel sources.”
2. Standard Chartered pressured over Australian “coal bomb.”
London-based Standard Chartered is feeling the heat from shareholder groups to terminate financing connected with the Carmichael mine and railway in Queensland, Australia.
The project, under the direction of a subsidiary of Indian conglomerate Adani, is worth $16.5 billion Australian dollars ($12.58 billion U.S.), and the bank had denied providing any funding, saying that it was advising Adani on the project.
However, in legal testimony before a Queensland court, an Adani mining subsidiary executive disclosed that the bank had provided a loan of $680 million to the company. The bank, for its part, characterized the loan as “a preexisting refinancing facility that was not part of the expansion of the port or construction of the mine.”
Standard Chartered’s corporate motto is “Here for good,” and most British pension funds have invested in the bank. The mine, which would be the largest in Australia and one of the largest in the world, would export most of its coal to India; it’s been termed a “carbon bomb.” But it’s only the first in a planned series of at least eight more mega-mines in Western Queensland, in the Galilee Basin.
3. Australian aboriginals sue.
Standard Chartered isn’t the only firm being pressured over Australian coal mining. Two Aboriginal landowner groups have filed suit challenging Adani’s Carmichael coal mine, and have said they are determined to halt the project.
The Wangan and Jagalingou (W&J) people, who are the traditional owners of the land, are challenging “the decision of Australia’s National Native Title Tribunal that the Queensland government may issue mining leases for Carmichael,” W&J traditional owner and spokesperson Adrian Burragubba said in reports.
The groups intend to warn off global financiers, as well as to accuse banks of human rights violations if they fund the project without the consent of indigenous peoples.
4. Zombie koalas demonstrate.
Protestors dressed as koala corpses protested at ANZ Bank in Brisbane, Australia, and promised additional demonstrations across the country at other bank branches because of ANZ’s involvement with the Whitehaven coal mine at Maule’s Creek in New South Wales.
Not just native wildlife is being killed, according to activists; higher exports of coal will necessitate a port project that also threatens the Great Barrier Reef. All this is in addition to climate concerns should the mining projects proceed.
