November 24, 2015
This year was the hottest year ever recorded on Earth. According to scientific modeling from scientists at University College London, if we don’t want it to get any hotter and stick to a 2 degree Celsius rise — the international target recommended by experts ahead of the Paris climate change talks — we must keep between 60-80% of known fossil fuel reserves in the ground.
That’s why the Goldman Environmental Foundation, along with many others, has pledged to divest all investments from fossil fuels and make the switch to clean energy. This means that we pledge over time, to sell holdings of fossil fuel shares and invest instead in climate solutions, such as renewable energy, clean tech, and energy efficiency.
Together, these commitments represent a total divestment of over $2.6 trillion in assets. Given the incredible example set by Goldman Prize recipients, it is our responsibility to stand with them on the front lines of the climate crisis.
One Fossil Fuel Stands Out
Despite these efforts, one particular fossil fuel continues to be financed and extracted at an alarming rate: coal.
It should come as no surprise that coal makes our air dirty. Really dirty. In fact, coal contributes more to the climate crisis than any other energy source and we’re burning through it faster than ever before. There has never before been so much coal burned and mined as today, and even the mines themselves are getting bigger.
Banks and Coal: A Dark Alliance
Billions of dollars are needed to build the infrastructure needed for these mega mines. According to the 2015 Coal Atlas, which shows the latest facts and figures on the use of coal and its environmental and social consequences, commercial banks are more than happy to step in. Between 2005 and 2014, public financing for coal projects — of which banks are the largest contributor — added up to $500 billion.
Heffa Schucking (1994, Germany), activist and founder of Urgewald, an organization that targets investors that finance destructive projects in the developing world, says that banks see coal investment as a business opportunity, often in contradiction of their own “green” credentials:
“Deutsche Bank says ‘carbon neutral since 2013’ on their webpage, they call themselves a climate ambassador. At the same time they’ve just bankrolled a huge deal for Coal India, the world’s second largest coal producer. In India, the last tiger habitats will be sacrificed for coal mines.”
Standing In The Way of Coal
Research conducted by Urgewald has shown that banks are fueling this boom in so-called ‘mega-mines’ worldwide. Earlier this year, they successfully persuaded Norway’s Government Pension Fund — the second-largest pension fund in the world — to divest from coal.
In addition, Urgewald has celebrated another landmark victory: after years of pressure by the organization, the world’s largest insurance company Allianz has just announced that it is also phasing out coal, making it the largest coal divestment in history.
Schucking knows that the fight isn’t over, and with support from the Goldman Environmental Foundation and the Leonardo DiCaprio Foundation, is organizing a series of ‘black deal’ campaigns to block coal finance. This includes targeting the European banks that are financing the destructive mining technique of mountaintop removal in Appalachia, West Virginia – a practice banned in Europe.
Schucking’s reasoning behind these campaigns is simple:
“If these banks do not change course, they will undermine all efforts to preserve our climate.”
Not Standing For It
Both banks and industry will continue to justify coal production as a solution to ‘energy poverty,’ and that mines will provide jobs to local communities. Even leaders at the World Bank say otherwise. Most importantly, after years of work visiting mining sites, Schucking — along with several other Prize winners and aid agencies — has seen first-hand that mines not only harm people’s health, but displace them from their homes:
“People who have been moved because of mines or power plants…they don’t have electricity”
Voices from people and organizations across the globe are joining the fight and demanding that banks divest from coal:
Don’t Bank on It
Coal investment isn’t just a problem for foundations and financial institutions. Individuals can play a big part in ensuring a cleaner, more sustainable future too. As a first step, Schucking recommends simply asking your bank if it’s an investor:
“In banks’ annual environment report they’ll give you numbers on how many renewables they finance. But if you ask them about coal, they don’t want to talk about it. Just asking has an impact. Banking with ethical, cooperative credit unions is usually a better way to go.”
You can also check out Urgewald’s ‘Bank Track’ which monitors the involvement of banks in financing business activities harming both people and the planet. Schucking emphasizes that now is the time to ensure we are not complicit with this trend:
“What we see with the big banks [is] that they don’t care about the planet, they don’t care about the climate and they don’t care about your future. If you keep your money with them, then your money is working against our common future.”