The Center for Energy, Ecology, and Development (CEED) on Tuesday unveiled its latest instrument in the effort to encourage financial companies to divest from its coal investments.
The Coal Policy Tool, an online tool to identify, assess, and compare the policies adopted by financial institutions worldwide to restrict or end their financial services to the coal sector was released by Paris-based research organization Reclaim Finance, in partnership with 27 other NGOs.
“We thank Reclaim Finance for developing this tool to help us keep track of current investments in coal and what these companies are doing to help limit the continued use of coal and stop its harmful effects to health and the environment,” said Gerry Arances, Executive Director of CEED.
The Coal Policy Tool rates the coal sector policies of 214 financial institutions on a consistent and transparent scoring grid on five key criteria; it also names the largest banks, re/insurers, asset owners and asset managers which have not made any efforts to divest from coal.
“The Coal Policy Tool allows all stakeholders and concerned parties to go beyond identifying and comparing policies, and have real-time data on actual companies and institutions which would be invaluable for the formulation of high-quality coal policies and to help reverse the climate emergency,” said Lucie Pinson, Founder and Executive Director of Reclaim Finance.
Although a trend has begun among advanced countries and large financial institutions from divesting from coal, the targeted reduction in greenhouse emissions set by the 2015 Paris Agreement is still unreachable due to the continued advance of coal in developing countries such as the Philippines, abetted by the technologically neutral policies .
“A good coal policy needs to cover the chain from mining to power; tackle all financial services, including corporate and project financing, underwriting, and passive fund management, and combine exclusion criteria and shareholder engagement to not only prevent the expansion of the coal sector but to also support its rapid phase-out,” said Arances.
CEED is one of the groups heading the Withdraw from Coal Campaign, which encourages local banks to phase out their investments in coal.
“The Coal Policy Tool will complement the coal policy analysis tool released by CEED in May for Philippines banks now being used to grade the fifteen institutions found to have been financing the coal industry,” said Arances.