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Banking industry

Top US Banks Cut Loans for Destructive Mining Practice Amid Environmental Concerns

Strategic Insights

— 2 min read

In a significant shift towards more environmentally conscious fossil fuels financing, top US banks have curtailed their loans for mountaintop removal (MTR) coal mining, a practice that has become increasingly controversial. At the forefront of this movement are Bank of America, Citi, JPMorgan Chase, and Wells Fargo, along with Credit Suisse and Morgan Stanley, which have all publicly limited their financial relationships with coal operators that engage in MTR. This transformation comes in response to national pressure spearheaded by the Rainforest Action Network (RAN) over the past three years, with the group campaigning against the environmental and investment risks associated with MTR.

Key Takeaways:

  • Bank of America was the first top US bank to issue a public policy limiting MTR financing in December 2008, followed by Citi in August 2009, Credit Suisse in September 2009, Morgan Stanley and JPMorgan in May 2010, and Wells Fargo in July 2010.
  • The major impacts of these mountaintop mining policies include a reduction in financing for Massey Energy, the leading MTR coal company, with JPMorgan Chase, Bank of America, and Wells Fargo ceasing their financial ties to the company.
  • PNC and UBS are currently the lead financiers of MTR, with PNC financing mining companies responsible for nearly half of all MTR coal mined in the US.
  • Mountaintop removal coal makes up 7% of the nation's total coal use, but the practice has devastating impacts on Appalachia's environmental and public health, with nearly 2,000 miles of Appalachian streams filled with toxic surface mining waste since 1992.
  • The estimated scale of deforestation from existing Appalachian surface mining operations is equivalent in size to the state of Delaware.
  • Rainforest Action Network (RAN) will continue to monitor the impacts of these bank policies on curbing MTR mining.

Statistics:

  • 2,000 miles of Appalachian streams filled with toxic surface mining waste since 1992 at a rate of 120 miles per year.
  • Estimated scale of deforestation from existing Appalachian surface mining operations: equivalent in size to the state of Delaware.
  • 7% of the nation's total coal use is comprised of mountaintop removal coal.
  • PNC finances mining companies responsible for nearly 50% of all MTR coal mined in the US.

Sources:

  • Rainforest Action Network (RAN) - environment.bankofamerica.com/assets/pdf/COAL_POLICY.pdf
  • Citi - citizens.citigroup.com/citi/citizen/finance/environment/mrcm.htm
  • Credit Suisse - ran.org/content/correspondence-banks-relating-rans-mtr-report-card
  • Morgan Stanley - msdw.org/global/Environmental_Policy.pdf
  • JPMorgan Chase - jpmorganchase.com/corporate/Corporate-Responsibility/document/cr_full_report_05-14_01_noblurb.pdf
  • Wells Fargo - wellsfargo.com/downloads/pdf/about/csr/reports/environmental_lending_practices.pdf
  • BankTrack - banktrack.org/show/dodgydeals/mountain_top_removal_coal_mining
  • Rainforest Action Network and Sierra Club's May 2010 scorecard on bank MTR policies - ran.org/content/grading-banks-mountaintop-removal-report-card

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