The biggest banks in the UK have lent and underwritten more to global coal companies than nearly any other country in the world, a new report claims.
The top five banks in the UK provided around 56 billion US dollars (£40 billion) in loans and underwriting in the two years to October last year.
Only banks on Wall Street and in Tokyo have provided more support to the coal industry than the City of London over the period, analysis from Reclaim Finance and Urgewald found.
Barclays alone provided around 27 billion dollars (£19 billion) of lending and underwriting to the sector, the report said.
Coal is a highly polluting fuel which emits more carbon than gas or oil when burned to produce energy.
In order to meet the targets to limit global warming that were set at the 2015 Paris Agreement signed at the Cop21 meeting, coal use needs to be heavily scaled back.
M&G is the only large UK financier that plans to cut off coal developers from their financial services.
The report’s authors contrasted this with France, where 26 institutions have committed to such a plan.
Lucie Pinson, founder and executive director of Reclaim Finance, said: “This report shows a tale of two cities – while in Paris banks and investors cleaned up their act on coal after Cop21, the City of London isn’t lifting a finger to end its deadly coal addiction, even if that means wrecking the UK’s reputation on climate.
“On the international stage the UK Government has sought to lead a global exit from coal, but the financial sector clearly hasn’t got the memo.”
The UK has practically phased out coal from its domestic electricity production.
All the banks included in the report have joined some form of pledge to cut their emissions to net zero – that is to say they do not emit more greenhouse gases than they remove from the atmosphere.
Yet the campaigners say that none of the banks have a “robust coal policy”.
Paddy McCully, energy transition analyst at Reclaim Finance, said: “The City of London has perfectly summed up the hollowness of net-zero commitments, when not accompanied by time-bound, tangible measures.
“If the UK is not to remain a motor of pollution across the world, its banks and investors need to rapidly establish red lines around coal expansion and follow through with divestment whenever they are breached.
“Fail to do so, and all the net-zero commitments in the world won’t be enough to restore their tarnished reputation on climate.”