coal in train boxcar awaiting transport

The ANZ and National Australia Bank are the biggest Australian lenders to coal. Heading up the list for Australian investors in coal is Macquarie Group and Magellan Financial Group.

The United States holds the most institutional investments in coal according to new NGO research into the world’s largest financiers and investors on the Global Coal Exit List (GCEL). Japan’s banks were the biggest lenders, while Chinese banks were the biggest underwriters.

As of January 2021, 4488 companies around the world hold investments totaling $US1.03 trillion.

The US holds a majority 58 per cent of coal industry investments, worth $US602 billion. US mutual fund company Vanguard is the world’s largest institutional investor, holding $US86 billion in coal industry investments, followed closely by BlackRock’s $84 billion. 

The US has shown little intent on pulling away from coal, especially given the last four years under the Trump administration’s coal-friendly agenda.

However, there is some hope for change under President Joe Biden, who recently signed an executive order to pull back on international financing of fossil fuels.

Macquarie Group is Australia’s primary coal investor with nearly $US5.3 billion in total, ranking 43 out of the 934 companies on the GCEL list. Magellan Financial Group, another Australian founded company, was also listed in the top 100 nations for $US4 billion.

1Vanguard United States11,840 74,012 85,852
2BlackRock United States4692 79,663 84,355
3Capital Group United States2021 36,330 38,351
4State Street United States1,366 31,138 32,505
5Government Pension Investment  Fund (GPIF)Japan 3003 26,080 29,083
6T. Rowe Price United States1099 14,337 15,436
7Fidelity Investments United States3679 11,179 14,857
8Government Pension Fund Global Norway 2308 12,264 14,572
9JPMorgan Chase  United States2351 11,881 14,232
10TIAA United States6877 6952 13,829
Top 10 Investors (January 2021 or most recent filing date, $US)

It isn’t just about investors, but also the banks enabling questionable lending practices. Researchers identified $US315 billion in loans from 381 commercial banks around the world.

Japan’s banks were the biggest lenders, providing an estimated $US76 billion in loans over the past two years.

“The coal policies adopted by Japanese banks are among the weakest in the world.” Japan campaign associate Eri Watanabe said. “They only cover a small portion of banks’ lending and do not rule out corporate loans or underwriting for companies that are still building new coal plants in Japan, Vietnam, the Philippines and elsewhere.” 

Australia’s big lenders – ANZ and NAB

In Australia, the biggest lender is ANZ in the number 42 spot, issuing an estimated $US1.9 million in loans. Close behind is National Australia Bank with $US1.2 million.

BankCountryLoan (in $US million)
1 Mizuho Financial Japan 22,244
2 SMBC Group Japan 21,222
3 Mitsubishi UFJ Financial Japan 17,929
4 Citigroup United States 13,508
5 Barclays United Kingdom 13,396
6 Bank of China China 8767
7 Bank of America United States 8471
8 JPMorgan Chase United States 7761
9 BNP Paribas France 7421
10 Wells Fargo United States 6266
Top 10 Lenders (Oct 2018 – Oct 2020)

Sneaking in with some slick indirect financing, the top 10 underwriters for coal were Chinese banks, who may have only accounted for 6 per cent of all lending, but provided 58 per cent of all underwriting, a total of $US567 billion.

While lending has been on the decline the last couple of years, underwriting has steadily risen from $US491 billion in 2016 to $US543 billion by 2019 — an 11 per cent growth.

Bank CountryUnderwriting (in $US mln)
1Industrial and Commercial Bank of ChinaChina36,993
2China International Trust and Investment Corp.China31,648
3Shanghai Pudong Development BankChina27,778
4Bank of ChinaChina24,263
5China Everbright GroupChina23,764
6Ping An Insurance GroupChina23,392
7Agricultural Bank of ChinaChina22,787
8China Construction BankChina22,488
9Industrial Bank CompanyChina20,931
10China Merchants GroupChina20,780
Top 10 Underwriters (Oct 2018 – Oct 2020)

The numbers reveal a “sobering reality check” for banks’ climate commitments according to Reclaim Finance policy analyst Yann Louvel. While 88 commercial banks adopted some form of coal policy, Reclaim Finance’s “Coal Policy Tool” estimated that only four employed “robust” coal exclusion policies.

“What we need are comprehensive, immediate coal exit policies,” Louvel said. “Now is the time for the finance industry to act. A speedy exit  from coal finance and investment is not only do-able and desirable, it is a question of  survival.”

Leave a comment

Your email address will not be published.