with no coal policy
with a coal policy
26
with a robust coal policy
What is the Coal Policy Tool?
- It counts, compares and rates the coal policies adopted by banks, (re)insurers, asset owners and asset managers.
- It enables clients, media, financial institutions and other stakeholders to easily navigate the coal policy jungle.
- It aims at ensuring high quality coal policies that effectively contribute to keep global warming below 1.5°C.
Please note that due to a methodological review in April 2023, the number of financial institutions assessed has been reduced. This may explain some discrepancies with previous statistics, particularly in terms of the number of policies assessed. See “Methodology” for more details.
This financial institution has one of the best practices with the adoption of a robust coal phase-out policy.
This financial institution has informed Reclaim Finance that it is working on a new policy which is expected to be published soon.
NA The criteria does not apply to this type of financial institution.
Reclaim Finance could not give a definite score and have contacted the financial institution for clarification.
The analysis grid
The first criteria covers the exclusion of coal mines, coal plants and coal infrastructure.
| Grade | Coal projects |
|---|---|
| 0 | No policy |
| 1 | Very weak exclusion of new coal plants and/or mountaintop removal (MTR) exclusion only |
| 2 | Exclusion of all non ultra-supercritical (USC) plants or OECD guidelines, or all new plants in developed countries |
| 3 | Exclusion of all new thermal coal mines OR Exclusion of all new coal plants in developed countries + all non USC plants everywhere (+ optional some restrictions for coal mines) |
| 4 | Exclusion of all new thermal coal mines + all new coal plants in developed countries or all non USC plants worldwide OR Exclusion of all new coal plants but exceptions |
| 5 | Exclusion of all new thermal coal mines + all new coal plants in developed countries + all non USC plants elsewhere OR Exclusion of all new coal plants |
| 6 | Full exclusion of new thermal coal mines and plants but potentially large exceptions |
| 7 | Full exclusion of new thermal coal mines and plants but minimal exceptions |
| 8 | Full exclusion of new thermal coal mines and plants with Carbon Capture and Storage (CCS) exception |
| 9 | Full exclusion of new coal mines and plants without CCS exception and a/ for banks existing projects retrofit extending the life of the plant ; b/ for insurers, stand-alone / facultative coverage for existing projects and exclusion criteria for packages |
| 10 | Full exclusion of coal mines, plants and infrastructure |
The second criteria addresses the exclusion of all financial services to companies planning new coal mines, coal plants or coal infrastructure projects.
| Grade | Coal developers |
|---|---|
| 0 | No exclusion of companies because of coal development plans |
| 1 | Exclusion only of new clients regardless of the threshold on coal mining and/or coal power |
| 2 | Diversification plans are considered but no explicit exclusion linked to coal development |
| 3 | Weak exclusion of some companies planning new coal projects or coupled with another criteria |
| 4 | Exclusion of companies listed in urgewald 120 Coal Plant Developers List (CPDL) |
| 5 | Exclusion of companies planning the construction of more than 1000 MW of new coal power capacity |
| 6 | Exclusion of companies planning the construction of more than 500 MW of new coal power capacity |
| 7 | Exclusion of companies planning the construction or building new coal plants |
| 8 | Exclusion of companies planning the construction or building new coal mines/plants |
| 9 | Exclusion of companies planning the construction or building new coal mines/plants/infrastructures |
| 10 | Exclusion of companies developing their coal capacity (because of construction plans of new coal mines/plants/infrastructure ; purchase of existing coal assets without clear commitment to close it and selling equipment for new coal projects). |
Malus of minus 1 when minimal exceptions, minus 2 when large exceptions
Malus of 1 or 2 when policy not applied to all assets / all financial services
Malus of 1 when bonds are not sold or when it only concerns new coverage/investments
Malus of 1 when the exclusion does not cover financing subsidiaries and malus of 2 when it does not cover the group level
Maluses do not apply below score 1
The third criteria covers the exclusion of companies which are most exposed to the coal sector, based on their share of revenues or electricity production from coal.
| Grade | Coal relative thresholds |
|---|---|
| 0 | No exclusion of companies because of their relative exposure to coal |
| 1 | Exclusion only of new clients regardless of the threshold on coal mining and/or coal power |
| 2 | Some exclusion for existing clients but only on coal mining or on coal power |
| 3 | Weak exclusion for existing clients for both coal mining and coal power companies |
| 4 | Exclusion of companies > 50 % coal share of revenues (CSR) / coal share of power production (CSPP) |
| 5 | Exclusion of companies > 45 % CSR / CSPP |
| 6 | Exclusion of companies > 40% CSR / CSPP |
| 7 | Exclusion of companies > 35% CSR / CSPP |
| 8 | Exclusion of companies > 30% CSR / CSPP |
| 9 | Exclusion of companies > 25% CSR / CSPP |
| 10 | Exclusion of companies > 20% CSR / CSPP |
Malus of minus 1 when minimal exceptions, minus 2 when large exceptions
Malus of 1 or 2 when not applied to all assets / all financial services
Malus of 1 when bonds are not sold or when it only concerns new coverage/investments
Malus when wrong metric used for coal power from 20%: minus 1 for revenues and capacity instead of power generation
Maluses do not apply below score 1
The scoring grid goes above 10, applying the same logic (15% = 11, 10% = 12, 5% = 13, 0% = 14), to acknowledge exclusion thresholds which are more exigent than our 20% demand before the consideration of maluses, but the overall score is capped at 10. Only the 2 point malus for policies only covering half or less of the assets is strictly applied to scores above 10.
The fourth criteria covers the exclusion of the largest coal producers and largest coal plant operators.
| Grade | Coal absolute thresholds |
|---|---|
| 0 | No exclusion of companies because of their absolute exposure to coal |
| 1 | Exclusion only of new clients regardless of the threshold on coal mining and/or coal power |
| 2 | Exclusion of some companies based on some absolute criteria |
| 3 | Exclusion of mining companies producing more than 100 MT coal a year |
| 4 | Exclusion of mining companies producing more than 50 MT coal a year |
| 5 | Exclusion of mining companies producing at least 20 MT coal a year ; or any lower exclusion threshold for mining companies but no exclusion of power companies |
| 6 | Exclusion of mining companies > 20 MT and some power companies based on some absolute criteria |
| 7 | Exclusion of mining companies > 20 MT and power companies > 15 GW |
| 8 | Exclusion of mining companies > 20 MT and power companies > 10 GW |
| 9 | Exclusion of mining companies > 15 MT and power companies > 5 GW |
| 10 | Exclusion of mining companies > 10 MT and power companies > 5 GW |
Malus of minus 1 when minimal exceptions, minus 2 when large exceptions
Malus of 1 or 2 when not applied to all assets / all financial services
Malus of 1 when bonds are not sold or when it only concerns new coverage/investments
Maluses do not apply below score 1
The fifth criteria relates to the quality of the coal phase-out strategy.
| Grade | Coal phase-out |
|---|---|
| 0 | Has not announced a coal phase-out |
| 1 | Has announced its intention to phase out coal with no deadline for coal mining and/or coal power |
| 2 | Has announced a global coal phase-out by 2050 for coal mining or coal power |
| 3 | Has announced a global coal phase-out by 2050 for coal mining or coal power ; exclusion of some coal developers OR Has announced a global coal phase-out by 2050 for coal mining and coal power OR Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining or coal power |
| 4 | Has announced a global coal phase out by 2050 with the intermediary date of 2030 for Europe/OECD, or a global coal phase-out by 2040, for coal mining and coal power OR Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal power ; exclusion of some coal developers |
| 5 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal power ; exclusion of all coal plant developers OR Has announced a global coal phase out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power |
| 6 | Has announced a global coal phase-out by 2050 with the intermediary date of 2030 for Europe/OECD, or a global coal phase-out by 2040, for coal mining and coal power ; exclusion of some coal developers ; at least one of these 2 elements: – demand of an exit plan – decrease of exclusion threshold over time OR Has announced a global coal phase out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power ; exclusion of some coal developers |
| 7 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power ; at least 2 out of these 3 elements: – exclusion of some coal developers – demand of an exit plan – decrease of exclusion threshold over time OR Has adopted very restrictive exclusion criteria that implies an almost immediate full coal mining and coal power phase-out |
| 8 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power ; exclusion of coal mine developers and coal plant developers OR Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power ; exclusion of all coal plant developers ; at least 1 out of these 2 elements: – demand of an exit plan – decrease of exclusion threshold over time |
| 9 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power ; exclusion of coal mine/plant/infrastructure developers ; demand of an exit plan OR Has adopted a total exclusion criteria that implies an immediate full coal mining and coal power phase-out, but no exclusion of all coal mine/plant/infrastructure developers |
| 10 | Has announced a global coal phase-out by 2040 with the intermediary date of 2030 for Europe/OECD for coal mining and coal power ; exclusion of coal mine/plant/infrastructure developers; demand of a closure plan and exclusion process if companies fail to adopt a closure plan OR decrease of exclusion threshold over time |
Malus of 2 if phase-out commitment only covering lending not underwriting or only a small part of the assets owned/managed
Malus of 1 if phase-out commitment apply only to new financing/coverage and not existing financing/coverage
Malus of 1 if commitment only applies to assets, and not companies (for insurers)
Malus of 1 or 2 if commitment only applies to financed companies and not to the financial player itself
Malus of 2 if financing of new coal mine or plant projects is still possible
Maluses do not apply below score 1
A “phase-out” strategy qualifies in this assessment if the end goal is a maximum 5% exclusion threshold, but a malus of 2 is applied if the metric used is EBITDA
Read more about the methodology and the rationale behind each of the 5 criteria.
All financial institutions were contacted and had an opportunity to comment on their ratings before publication.
Did you identify a mistake? A financial player is missing? Feel free to contact us: contact@coalpolicytool.org.
