“The financial institutions leaving coal behind are no ethically minded minnows – they are some of the largest across the globe. As extreme weather increases in frequency and extremity the list will continue to grow, while the lending exclusions and divestments will increasingly be delivered upon.”
Mr Buckley said of the 100 global financial institutions that have divested from thermal coal, 40 per cent were in the top 40 of global banks and 20 were globally significant insurers.
“While many of the policies initially contained exclusions and technology or country exemptions, these loopholes are increasingly being closed off in subsequent policy refinements,” the report said.
“It is clear to IEEFA that global investor and debt capital are fleeing coal at an increasing rate and it is forseeable that thermal coal and power plants become uninsurable in the medium term. As a leading example, private finance in India for a new power plant is no longer available. The rate of change globally looks very much like dominos falling, raising the question of who will make the next move.”
Indian company Adani struggled for years to gain finance for its controversial $2 billion Carmichael mine as activists targeted Australian and international banks over their lending policies. After public pressure some banks said they would not lend money to the project in Central Queensland.
Adani Australia was forced to fund the project itself – calling on funding from the parent company in India – to raise money for the scaled-back project.
Mining giant Glencore last week announced it would cap future coal production at 2019 levels, which activists seized on as a further example of the death of coal as an energy source. Others pointed out the decision to cap production would boost the price of thermal coal, making it a more attractive proposition for Glencore.
It comes as the Palaszczuk Labor government in Queensland came under more fire on Monday for its position on the Adani mine.
During questioning in Parliament, Premier Annastacia Palaszczuk said her government was not turning its back on resource projects, despite the extra requirements being imposed on the Carmichael mine.
In December the Palaszczuk government commissioned an external review into Adani’s environmental management plan for the black-throated finch instead of signing off on the company’s environmental approvals.
Adani is also awaiting the green light for its environmental management plan for groundwater from the Commonwealth, which has asked the CSIRO and Geoscience Australia to look at the company’s plans.
The delays caused Adani to shelve plans to begin construction before last Christmas, with growing fears there will be further delays that will take it past the federal election in May.