- JPMorgan pledge similar to ones by Morgan Stanley, Citigroup
- Bank won't finance coal-fired power plants in some countries
JPMorgan Chase & Co. became the latest big bank to pull back from coal.
The New York bank will no longer finance new coal mines around the world and will end support for new coal-fired power plants being developed in “high income” countries of the Organisation for Economic Co-operation and Development, JPMorgan said in a policy statement on its website.
JPMorgan is joining a growing list of financial institutions including Bank of America Corp., Citigroup Inc., Morgan Stanley and Wells Fargo & Co. that have pledged to stop or scale back support for coal projects. It’s part of a broader divestment campaign led by environmental groups including San Francisco-based Rainforest Action Network looking to move the world’s economies beyond fossil fuels.
“We believe the financial services sector has an important role to play as governments implement policies to combat climate change,” JPMorgan said in the document.
The National Mining Association, which represents coal producers including Peabody Energy Corp. and Arch Coal Inc., called JPMorgan’s changes “hardly a heroic gesture” given challenging market conditions for all fossil fuels. “The bank hedges its bets on financing projects in developing countries, because, not surprisingly, that’s where the growth is and will be,” group spokesman Luke Popovich said in an e-mail.
The divestment campaign still delivers another blow to an industry already struggling through its worst downturn in decades. Coal is under siege from cheap natural gas stealing market share at power plants, tougher emissions standards and slowing global demand. The combined market capitalization of U.S. coal miners since 2011 has plunged from $74.4 billion to less than $7 billion, according to data compiled by Bloomberg.
Outside of rich countries, JPMorgan will back only coal-fired power plants that employ “ultra-supercritical” technology that is more efficient than conventional systems. The bank will consider on a "case-by-case basis" coal plants that capture carbon-dioxide emissions and prevent their release into the atmosphere.
JPMorgan also plans to shrink its credit exposure in the “medium term” to companies that generate most of their revenue from coal mining and sales. The bank said it expects its business to reflect the “decline of coal as an energy source.”
JPMorgan updated its policy statement on Friday. In a 2013 version of the statement, the bank said it would reduce its exposure to companies that engage in "mountaintop mining" in Appalachia.