Coal and banking, 3 years after COP26

In November 2021, the world took a historic step at COP26, when 197 governments pledged to phase down coal, and many of the largest commercial banks committed to decarbonize their portfolios what was in line with the Net Zero by 2050 Roadmap designed by the International Energy Agency (IEA). Fast forward to 2024 and it’s as if Glasgow never happened.

Still Banking on Coal 2025 report

Today, Urgewald and 23 NGO partners released a new report tracking commercial banks’ financial flows to the coal industry since COP26.

According to the report: $385 billion has been funneled into coal by commercial banks over the past three years. While financing slightly dipped in 2023, it bounced back in 2024 from $123B to $130B.

Katrin Ganswindt the Director of Financial Research at Urgewald stated: “We were hoping to at least see a consistent downward trend, but the annual breakdown of our data shows that while coal financing dropped from $132 billion in 2022 to $123 billion in 2023, it shot back up to $130 billion in 2024. It’s as if Glasgow never happened”.

Banking

According to the Still Banking on Coal 2025 report: 92% of coal finance came from banks in China ($248B), the US ($51B), Japan ($21B), Europe ($20B), and Canada ($12B). The BankTrack additionally provides that top funders are: Bank of America, JPMorganChase, and Citi while Jefferies became the fastest-growing U.S. coal financier, investing $2B in Adani Group. The report concludes that Indonesian banks are deepening coal ties, while others, like Japanese and European institutions, show a modest reduction. Furthermore, 24 of the 99 largest banks have a plan to phase out coal financing by 2040.

Need to change

Richard Brooks, Climate Finance Director of the Canadian NGO Stand.earth and Ayumi Fukakusa, Director of Friends of the Earth Japan, both have issued the expectations stating respectively: “With their almost non-existing commitments, Canada’s big commercial banks are keeping coal alive. Prime Minister Carney must pursue regulations that drive banks to switch their energy finance from the bad to the good”. “Japanese banks still lack credible transition plans and have yet to adopt policies that are in line with the Paris Climate goal. Especially Mizuho and MUFG need to stop dragging their feet. Their portfolios read like a who is who of companies that are resisting a transition. Mizuho and Mitsubishi UFJ must adopt firm coal phase-out commitments without loopholes”.

Changes in coal sector

Barry Tudor, CEO of Pembroke Resources, has observed interesting changes when it comes to how financial institutions view coal, particularly steelmaking coal. Between 2020 and 2022, Pembroke’s Olive Downs project saw its pool of potential funders shrink drastically. But now, things are starting to turn.

While coal as a whole remains a contentious topic in the sustainability conversation, there seems to be growing recognition of the essential role steelmaking coal plays in infrastructure and the global energy transition.