Bank of America has just dumped coal
Bank of America, one of the largest banks in the United States, has decided to slash its financing for coal mining projects, as it now considers the sector as a “highly risky” one to invest on.
Speaking at the shareholders meeting, Andrew Plepler, Bank of America's Corporate Social Responsibility executive, said the new policy reflects the lender’s decision to continue to reduce its credit exposure to the coal mining.
"Today, our renewable energy portfolio is more than three times as large as our coal extraction portfolio," Plepler said. "The transition from high-carbon energy to low-carbon energy will continue. At Bank of America, we will continue to do our part to accelerate this transition for our customers, clients and communities."
The new bank policy, published Wednesday, notes that the “dynamics around coal are shifting,” and cites pollution regulations, changes in economic conditions, increased competition from shale gas and renewable power as the main drivers of such change.
According to the World Coal Association, coal currently supplies about 30% of the world’s main energy needs and over 40% of its electricity. At the same time, consumption of the fossil fuel in China, the world’s biggest consumer, fell in 2014 for the first time in 14 years. The nation has said it will ban coal use in smog-cloaked Beijing by 2020.
Bank of America is not alone. Other major financial institutions, such as Goldman Sachs, are also distancing themselves from the fossil fuel.
Image courtesy of Cerrejon, Colombia.