Most Major Banks Still Fund Mountaintop Removal Mining, Report Finds
Thanks in part to the ardent campaigning of some outspoken activists, many of the nation's biggest banks now boast policies that cut off lending to companies engaging in the disastrous practice of mountaintop removal mining. Wells Fargo, Citi, Bank of America, JPMorgan Chase, Morgan Stanley, Credit Suisse, and most recently, PNC Bank, have all stepped up to publicly decry the increasingly unpopular mining technique. That makes seven banks in all that have denounced MTR. But the real question is -- are their anti-mountaintop removal lending policies any good? The NRDC just issued a report with some not-so-surprising results: Like a coal ash slurry in Tennessee, the money keeps flowing. The report concludes that despite some minor adjustments to lending policy, and ceasing to fund one of the worst offenders, by and large banks are indeed continuing to fund companies that practice mountaintop removal.
Here's the NRDC:
... most of the lending guidelines adopted do not actually stop financing MTR coal producers as a matter of policy ... Our new analysis examined Securities and Exchange Commission records to determine whether a bank's MTR lending policy resulted in decisions to withhold financing agreements with any of the seven biggest MTR coal producers (Massey Energy, International Coal Group, Patriot Coal, Arch Coal, Alpha Natural Resources, Teco Energy, Consol Energy.)The problem is, most of the banks' new policies rely only on "enhanced due diligence" and subject lending decisions to a set of rather arbitrary guidelines: For instance, they might only withhold funding if MTR is a company's "predominant" of "significant" part of its business. If the bank deems that it's not, the lending continues.
The bottom line: Despite taking some initial steps to curb lending, most banks are continuing to support MTR in a significant way.
Any policy is going to be arbitrary to some degree -- but the results speak for themselves in this case. All of the banks but one -- Credit Suisse -- have continued lending to mountaintop-removing companies. To their credit, the banks have abandoned Massey Energy, one of the biggest offenders. But given the PR crisis that company faced over this year's mine disaster, that decision was probably an easier one to make.
Going forward, we should seek to embrace banks like Credit Suisse, which is the only one of the bunch to actually institute a policy that seeks to end all its financial relationships with companies that do mountaintop removal. Publicly decrying MTR is one thing, but it's actually restricting the operations that matter. Removing mountaintops for profit is never going to be popular -- but so as long as there are willing financial sponsors, it's not going to stop.
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