US-based banking and financial services company JPMorgan Chase has announced that it will avoid financing new coal projects in advanced economies as they contribute to global warming.
The company further added it will not offer project financing or other forms of asset-specific financing that would be used to develop a new greenfield coal mine.
In a policy statement, JPMorgan said that it will apply due diligence to transactions with diversified mining and industrial companies where proceeds will be used to finance new coal production capacity.
The bank’s Environmental and Social Policy Framework noted that credit support to coal mining companies will be reduced over the medium term.
Support would be offered only to new coal plants in lower-income countries that employ ‘ultra-supercritical steam generation technology’.
JPMorgan’s new policy promises a transition away from financing for coal mining companies, and will put an end to financing of new coal mines.
The policy also includes a prohibition on financing new coal-fired power plants in high-income Organisation for Economic Co-operation and Development (OECD) countries.
JPMC’s latest proposal follows public pressure from climate activists as part of a campaign launched by Rainforest Action Network (RAN) in 2015, to hold US banks accountable for their financing of the coal industry.
Bank of America, Citigroup, Morgan Stanley and Wells Fargo have also committed to avoid financing coal mining.
Rainforest Action Network senior campaigner Ben Collins said: "In order to have a chance at stabilising the climate, we need financial institutions to follow these commitments on coal mining with further steps to end coal financing altogether.
"It’s time for the financial sector to step up and lead the just transition we need to a clean, renewable future."
Image: JPMorgan will apply due diligence to transactions with diversified mining companies where proceeds will be used to finance new coal production capacity. Photo: courtesy of dan/ FreeDigitalPhotos.net.