When a major Australian utility turned its back on coal recently, I was surprised.
After all, it wasn't long ago that energy experts everywhere expected global coal use to climb for decades to come.
But those expectations have crumbled in just a few short years. And in yet another sign that the global coal boom is over, Bank of America has just announced a sweeping new commitment to scale down its credit exposure to coal mining. Here's how Bank of America’s Andrew Plepler announced the policy at the bank’s annual shareholder meeting:
"With regard to coal, over the past several years we have been gradually and consistently reducing our credit exposure to companies focused on coal mining. Our new policy...reflects our decision to continue to reduce our credit exposure over time to the coal mining sector globally.”
Rainforest Action Network (RAN), which has been spearheading a campaign against the bank's coal lending, welcomed the move, calling it a challenge to other financial institutions. RAN's Climate and Energy Program Director Amanda Starbuck (who, in the interests of full disclosure, is an old university friend of mine) had this to say:
“Today’s announcement from Bank of America truly represents a sea change: it acknowledges the responsibility that the financial sector bears for supporting and profiting from the fossil fuel industry and the climate chaos it has caused. In real terms, this means the bank is turning its back on the coal mining industry and committing to energy efficiency and renewable energy.”
Formidable though RAN's campaigns are, I have a hard time believing that Bank of America is doing this for image purposes alone. With China's coal consumption falling and financial experts fretting over unburnable fossil fuels, lenders and investors everywhere are starting to ask some tough questions of companies who make their living producing or burning fossil fuels.
That said, while the Bank of America announcement earned it accolades from the activist community, the bank—like most financial institutions—still has a long way to go. It continues to lend heavily to companies involved in coal-fired power production, for example.
Still, every journey starts with a first step...