This post was co-written by Mark Kresowik, Corporate Accountability and Finance Representative for the Sierra Club.
The idea of corporate responsibility has come up repeatedly in recent weeks following the coal mine and oil disasters. That responsibility extends beyond profits to the health and well-being of our communities. By continuing to finance mountaintop removal coal mining these banks are throwing that responsibility aside.
Many of us talk about the harm that coal companies are doing to people and the environment with mountaintop removal coal mining, but the blame is not just at Big Coal’s doorstep.
It takes billions of dollars to destroy communities, blow the tops off Appalachian mountains and bury thousands of miles of streams, as mountaintop removal coal mining does. Today the Sierra Club, Rainforest Action Network (RAN), and BankTrack are grading the lending policies of nine of the world’s largest banks that help finance the most destructive practices of the coal industry. See the report card here:
The report card reviews the financing practices of Bank of America, Citi, Credit Suisse, Wells Fargo, JPMorgan Chase, Morgan Stanley, GE Capital, PNC and UBS, and found that since January 2008, these banks have provided more than $3.9 billion in loans and bonds to companies practicing mountaintop removal coal mining, including Massey Energy and Arch Coal.
So who are the biggest losers? PNC, which finances almost half of all mountaintop removal coal mining, ranked worst of the worst. The bank earned an “F” for its total failure to take environmental risks into account in its lending practices. Also flunking this year’s report card were UBS and JPMorgan Chase, which respectively finance about one-third of all the mountaintop removal coal mined in Appalachia, and GE Capital, which backs about one-quarter of all operations.
Credit Suisse topped the list this year, earning an “A-” for their efforts to promote responsible mining practices. Credit Suisse has confirmed, although their policy isn’t publicly available, that they do not finance the extraction of coal in a mountaintop removal setting. Wells Fargo received a solid “B+” for their commitment to phase out financing for mountaintop removal coal mining, including some deals the bank inherited from their purchase of Wachovia.
RAN and Sierra Club disclosed the findings of this report card to each of the nine banks in the report card and offered them the opportunity to clarify their policies in case we missed something. We were a bit surprised by what happened next. In response to initial report card findings, Morgan Stanley released a public mountaintop removal policy (on Tuesday, May 11th) that demonstrated significant progress and moved them from a failing grade to an average “C” grade.
Bank of America and Citi, two of the first banks to release mountaintop removal coal mining policies after years of pressure from RAN and other partners, also ended up in the “C” range. But perennial mountaintop removal coal mining laggard JPMorgan Chase has yet to make public changes to their mountaintop removal financing policies, and even went so far as to omit a shareholder resolution on the topic from the ballot for the bank’s annual meeting on Tuesday, May 18th.
The Sierra Club and our partners will continue calling for each of the nine banks reviewed in this report card to strengthen their policies and cease their financial support for mountaintop removal coal mining. Our recommended ‘best practice’ is a clear exclusion policy on commercial lending and investment banking services for all coal companies who practice mountaintop removal coal extraction. It is time for JPMorgan Chase, UBS, PNC, and GE Capital to move up from the very bottom of their class.