Global financial industry retreat from coal hasn't cut its funding
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Financial industry pledges to move away from coal haven't translated into reduced worldwide funding, per a new analysis from environmental groups.
Why it matters: Coal is the most CO2-intensive fuel, and its future trajectory will help dictate how much global warming occurs.
Driving the news: The report from German NGO Urgewald and other groups traces funding since the 2021 UN climate conference in Glasgow, Scotland.
- The summit featured many non-binding country pledges to phase down coal and major bank vows to wring CO2 out of their portfolios over time.
What they found: The analysis of 650 commercial banks worldwide, which explores finance for thermal coal production and coal-fired power, shows $130 billion in loans and underwriting in 2024.
- That's up from $123B in 2023 and similar to the $132B in 2022, the year after COP26.
- China was by far the biggest source of finance in 2022-2024 at $248B.
- The rest of the top five are the U.S. ($51B), Japan ($21B), Europe ($20B) and Canada ($12B).
The intrigue: A number of major banks — including U.S. giants — have been leaving various industry climate alliances.
- "Since this exodus, Citi is the only US bank with a public commitment to phase out coal financing," the report states, though it also finds Citi has increased financing since Glasgow.
- And Bloomberg reports that "after an initial flurry of action to pare back their financing, some banks have relaxed their coal restrictions in recent years."
Zoom out: The data comes as global energy demand is rising, bringing new consumption records across sources.
- "In 2024, oil, gas, coal, nuclear, hydro and renewable energy all registered increases, that is, all forms of energy saw an increase in demand[,] something that last occurred in 2006," per the recent Statistical Review of World Energy.
Coal demand is still rising — albeit more slowly — as consumption growth centered largely in China and India outpaces declines in advanced economies.
The bottom line: "It's as if Glasgow never happened," Katrin Ganswindt, Urgewald's director of financial research, said in a statement.
