sharing in governance of extractive industries
The world’s biggest banks are continuing to fuel climate change through the financing of extreme fossil fuels (Banktrack, 2017). The funding provided by banks for extreme fossil fuels (like tar sands, Arctic and ultra-deep offshore oil), coal mining and coal power remains worrying, despite a steep decline in 2016.
Coal mining: While many U.S. and European banks have begun to put policies in place to curb financing for coal mining, in the last three years major banks have financed it to the tune of $57.92 billion. Bank of China and the three other Chinese megabanks are at the top of the list, with Deutsche Bank as the top Western banker of coal mining. (Banking on Climate Change Report, 2017)
Coal power: With no room in the global carbon budget for new coal, as well as a need for winding down existing coal plants, it is worrying that financing for coal power is on an upward trend in the last three years. Overall, big banks financed $74.71 billion of coal power, led by China Construction Bank and its three other Chinese peers, with JPMorgan (Banking on Climate Change Report, 2017)
In my humble opinion, it has been more than sufficiently demonstrated and concluded that coal mining and power operations belong to the 19th or 20st century. Don’t we all know that they have grave impact for the climate which we cannot afford any longer? Furthermore, these coal mine operations require huge amounts of land and are very often ‘risky business’ with not a very bright track record causing serious pollution, impacting the health of surrounding communities, and very often violating fundamental human rights (like forced resettlements, contaminating critical drinking water supplies, destroying community livelihoods or responding violently to peaceful protesters).
Coal should be phased out as soon as possible; this also implies that special efforts are needed to provide new future perspectives for the (few) people employed in this sector. Alternatives in f.e. renewable energy are plenty, available and feasible.
I strongly believe that very often it ‘just’ takes some courage (and political will) to take clear decisions in the best interest of the society as a whole. Although this ‘best interest’ is not seldom interpreted quite confusingly when politics come into play, allow me to argue that in the case of coal mine, the picture is pretty clear: coal is out; there are far better and cheaper alternatives available.
Banks are a key player to support a transition towards more sustainable living and livelihoods. In their role to serve the best interest of the societies they operate in, bank should adopt and implement policies that ensure rapid phase-out their investments in fossil fuels. However, various reports, just like the one of Banktrack, continue to be published demonstrating that banks still are funding the exacerbation of climate change. Their message is clear: “banks must bring their business practices into alignment with a 1.5° world, while respecting human rights and Indigenous rights…”.
How can we get banks to really become a part of the solution instead of financing the problem? How to we push banks to stay away from these climate change fueling projects and companies? How can we ensure banks to respect their (at least moral) obligation to defend human rights? How can we get banks to adopt and implement broad-based commitments to phase-out financing for the coal industry? It is through growing public pressure or do we need to wait till there is a sufficiently lower financial return on their risky investment?
Can you share of any good practices of financial institutions in the countries that you work in that stepped away from coal mining?
Read the report here: https://www.banktrack.org/news/fossil_fuel_finance_report_card_2017...
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