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Open Translation
LONDON: Six months before the UK hosts COP26 in Glasgow, a report from NGOs Reclaim Finance and Urgewald says Britain’s largest banks - Barclays, HSBC, Standard Chartered, NatWest and Lloyds Banking Group - provided US$56 billion to companies on Urgewald’s Global Coal Exit List (GCEL) between October 2018 and October 2020.

The GCEL provides key statistics on over 900 parent companies and 1,800 subsidiaries operating along the thermal coal value chain. Investors representing over US$ 14 trillion in assets use its divestment criteria to screen coal companies out of their portfolios.

Acknowledging the challenge involved in closing 6,600 coal-fired power stations worldwide by 2040 to stay within the Paris Agreement boundary, the ‘City of Coal’ report makes 10 recommendations to achieve it:

• With immediate effect, no direct support should be given to new or existing coal mining, power plants and infrastructure projects.

• From now on, divest from and exclude from all financial services those companies that are developing new projects in mining, power plants and coal infrastructure.

• With immediate effect, put a moratorium on the provision of financial services to companies that sell equipment for the construction of new coal projects or purchase existing coal assets, and lift it only after commitments emerge from these companies to cease these activities.

• Divestment from and exclusion from all financial services of companies which derive more than 20 percent of their revenues or electricity production from coal, which produce more than 10 million tonnes of coal per year or which operate coal- red power plants with a capacity exceeding five gigawatts.

• Commit to no further provision of financial services and to reducing the exposure of financing, investment and insurance portfolios to the thermal coal industry to zero by 2030 at the latest in EU/OECD countries and by 2040 elsewhere.

• Require all companies to adopt within a year a plan for the gradual closure of their coal assets, including a detailed timetable aligned with the objectives of the Paris Agreement and the dates indicated above. Suspend all financial services in the event of default and exclude the company one year later if the problem is not resolved.

• Require all companies to undertake to close (not sell) their coal assets in anticipation of employee retraining and, conversely, not to buy back existing assets. Suspend all financial services in the absence of a commitment and exclude companies in the event of a transaction of a coal asset without a commitment by the buyer to close the asset on a pre-identified date, as indicated above.

• Use the GCEL to identify companies’ exposure and development plans in the coal sector.

• Apply the policy across all financial services and all branches of the financial institution.

• Do not compromise the policy with exceptions. Only companies meeting the criteria indicated in point six could be exempted and receive services that are signposted and traceable to renewable energy infrastructure. The number of companies subject to such an exception must be publicly disclosed.

The report says Barclays, whose AGM was on May 05, provided over US$27 billion of lending and underwriting to GCEL companies over the last two years.

Reclaim Finance is composed of former and current campaigners and directors of European non-profit organisations. All of them specialise in financial and climate issues. Founded in 1992, Urgewald is a German environment and human rights NGO with a goal to establish strong environmental and social standards for the international finance industry.
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