- On eve of climate summit, lenders pledge to limit financing
- Moves follow similar efforts by Citigroup, Bank of America
Wells Fargo & Co.and Morgan Stanley became the latest big banks Monday to promise to cut their support for the coal industry in the name of reducing the pollution blamed for global warming.
Wells Fargo, the fourth-biggest U.S. bank by assets, said it would cut back on lending to coal-mining companies. Morgan Stanley, the sixth-biggest, pledged to reduce its exposure to coal-mining across the globe and also said it would apply more scrutiny to financing coal-fired power plants, in a new policy statement.
“We will continue to shift our lending and capital-raising efforts toward cleaner and renewable sources of energy and reduce the proportion of our energy financing to coal mining and coal-fired power generation,” New York-based Morgan Stanley said in the statement.
“Wells Fargo has been and will continue to limit and reduce our credit exposure to the coal mining industry,” Jennifer Dunn, a Wells Fargo spokeswoman, said in an e-mail.
The two companies join a growing list of lenders, including Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc., that have pledged to stop or scale back support for coal projects in recent months. The latest announcements came on the opening day of a United Nations summit in Paris where leaders from more than 150 nations are seeking a worldwide agreement to rein in climate change.
While the coal industry argues it’s a vital source of affordable electricity for poor nations, critics have targeted it as the most polluting of the fossil fuels blamed for skewing the Earth’s climate.
Morgan Stanley said any financing of coal-mining companies will now require “escalation and senior approval.” The same requirements will apply to financing that directly supports new or expanded coal-fired power projects in the developing world, according to the statement.