Despite energy shocks, divesting from coal is still a priority
(sustainabilityenvironment.com) – Over the past three years, the number of financial institutions that have formally committed to Coal divestment has doubled. Despite recent shocks on the energy markets, coal has temporarily become cheaper than gas. This was calculated by a dossier of the Institute for Energy Economics and Financial Analysis (Ieefa).
The race to Coal divestment
It took six years for the number of banks, investment funds and other financial players who decided to divest from coal to reach 100 worldwide. But from April 2019, to double to over 200, it only took three years, half the time.
And it’s not just an increase in institutions saying goodbye to coal. There are also revised and strengthened policies from those who had previously committed themselves. “Interestingly, it is not the largest asset managers who lead the way. It is rather the medium-sized ones who acknowledge their duty to customers,” stresses Christina Ng, Ieefa’s debt markets manager for the Asia-Pacific region.
The continent where the race to divest from coal is faster is also the one where coal is still a major part of the energy mix and where the coal pipeline is concentrated: Asia. Here we have gone from 10 to 41 financial actors with policies to stop coal between 2013 and 2022. In all, 22 actors with exit policies for coal located in emerging economies, including South Africa, Malaysia, China, Turkey, India and the Philippines. Europe, for its part, leads the world ranking with more than 50% (114) of the actors who commit to divest from coal and also has the most stringent policies compared to other geographical areas.