- UK bank channeled $10 bill to coal industry between Oct 2018 and Oct 2020
- $5.3 bill of Standard Chartered’s coal finance went to coal plant developers
- Bank will only start significantly dropping coal clients in 2027
One day ahead of Standard Chartered’s annual general meeting, a group of NGOs - among them Urgewald, CEED and Climate Risk Horizons - are criticizing the bank’s ongoing support for coal and other fossil fuels. According to research conducted by Urgewald, Standard Chartered channeled $10 billion to companies on the Global Coal Exit List between October 2018 and October 2020, with more than half of this amount ($5.3 billion) going to coal plant developers.
Standard Chartered is Europe’s bank with the highest financing for companies expanding the global coal plant fleet, such as Power Finance Corp (PFC) in India ($1.5 billion) or Top Frontier Investment Holdings in the Philippines ($594 million). With $283 million in underwriting services, Standard Chartered is also the third biggest financier of Adani, the company behind the highly controversial Carmichael coal mine in Australia.
Standard Chartered’s 2021 policy update
What is positive about Standard Chartered’s coal policy is that it excludes companies with at least 5% coal share of earnings in 2030. On the downside, by then, the fate of our climate will already be decided. Stricter measures are needed much earlier. However, Standard Chartered will only start excluding companies in 2024 if they exceed a threshold of 80% of earnings from coal. According to Urgewald’s research, this means that in 3 years from now, the bank would only have to drop 2 companies (CESC and NTPC, both from India). A strong effect on Standard Chartered’s portfolio will only be visible in 2027, when the threshold will be lowered to 40%.
Asia, where the bank’s core business lies, is the last resort for the expansion of the coal industry. Companies building new coal plants in the region can rely on Standard Chartered’s continuous financial support. PFC, for example, has zero earnings from coal operations, but is paving the way for new coal plants in India. Four new coal power plants with a total capacity of 9.6 GW began construction in India in 2019, and all have received funding from PFC. In theory, these kinds of companies could continue to be financed well after 2030.
Katrin Ganswindt, Head of Financial Research at Urgewald, comments:
“Any new coal plant under construction today is making it harder to accomplish the energy transition. That is why support for coal plant developers has to cease first. Moratoria for new coal plants, like in the Philippines, show that governments are aware of this problem. Private financial institutions cannot hide behind the assumed political will for new coal anymore. If Standard Chartered wants to be here for good, it needs to sharpen its coal policy. Dropping coal plant developers is the most urgent step.”
Standard Chartered is the leading bank behind the companies driving the expansion of the Philippines’ coal pipeline. Between October 2018 and October 2020, Standard Chartered has provided over $594 million in loans and underwriting services to Top Frontier Investment Holdings, the parent company of San Miguel Corporation (SMC). SMC is the Philippines’ largest corporation in terms of revenue and one of the top three coal plant developers in the country, with 3.4 GW of additional coal capacity in the pipeline.
Gerry Arrances, Executive Director at the Center for Energy, Ecology and Development (CEED), said:
"By providing some of the country's biggest coal developers like San Miguel Corporation and Aboitiz Power with billions of dollars worth of financing, Standard Chartered helped propel coal expansion in our country. In doing so, the Bank is driving an already climate-vulnerable country towards a more catastrophic future, and tying our people to decades of suffering pollution and costly electricity from coal. Standard Chartered needs to listen to the collective demand of Filipinos for an urgent and just transition away from coal. Standard Chartered must immediately stop funding coal in the Philippines and the rest of the world.”
Standard Chartered has also provided significant financial support ($ 1.5 billion) for India’s Power Finance Corporation (PFC) between 2018 and 2020. The government-owned business is India’s largest ‘non-banking’ finance company. As private sector banks have all but ceased lending to the coal sector, PFC has emerged as a lender of last resort and the largest financier of new coal projects in India. Four new coal power plants with a total capacity of 9.6 GW began construction in India in 2019, and all have received funding from PFC. PFC’s renewable energy lending accounts for just 10% of its electricity generation portfolio as of 2020.
Ashish Fernandes, CEO at Climate Risk Horizons, said:
“Wind and solar are now well established as the cheapest new sources of electricity for India – up to 50% cheaper than new coal. There is no developmental or financial rationale for new coal in India, and yet PFC continues to finance coal projects that will exacerbate air pollution and resource conflicts, apart from locking struggling consumers into expensive power contracts. Any further financing to PFC is not compatible with a safe climate, absent clear safeguards that ensure finance is only used for renewable energy projects.”
Jacey Bingler, Communications Coordinator, Urgewald
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