Ethical Performance
inside intelligence for responsible business
accompanying image


Barclays urged at AGM to ‘stop bankrolling’ dirty coal

May 2014

With the World Development Movement (‘WDM’), a UK-based campaigning group focussed on global justice, having successfully campaigned last year to make Barclays pull out of food speculation a number of their activists followed up by protesting at the bank’s annual general meeting (AGM) in London this April and called for the bank to immediately end its lending and underwriting relationships with companies engaged in ‘mountaintop removal’ (MTR).

 The move followed a report published last October by the organisation titled ‘Banking while Borneo burns’ in which WDM claimed that the top five UK banks (Barclays, HSBC, Lloyds, RBS and Standard Chartered) were “complicit in fuelling climate change” and destroying communities and the environment in the rainforests of Indonesian Borneo by their financing of an Indonesian coal boom.

 Nick Dearden, a director of WDM, commenting said: “Coal is the most destructive fossil fuel, both for the climate and for the people who have to deal with coal mining on their doorsteps.

“Barclays must stop bankrolling dirty coal, at the very least pulling out of mountaintop removal and ending its relationship with the companies mining coal in the Borneo rainforest as a first step.”

Since 2009 UK banks have lent more money for Indonesian coal than banks from any other nation.

For example, Standard Chartered, the UK’s second biggest bank, has lent more than any other bank in the world and is reported to have initiated loans of US$1bn (c.£0.64bn) in 2012 to Borneo Lumbung, an Indonesian company, which through its mining projects there polluted the river that Maruwei villagers rely upon. The river used to be clean but is now dark, dirty and undrinkable.

Further, around 83% of coal produced in Indonesia’s top coal province on the island of Borneo is mined by companies part-financed by UK banks according to WDM research.

Highlighting the magnitude of coal investments and funding, BHP Billiton, a London-listed mining giant, has received a total of £6.3bn since 2009 from Barclays, Lloyds, RBS and Standard Chartered.

As a FTSE 100 constituent virtually every pension fund in the UK invests in BHP Billiton.

For its part, Barclays has provided the global mining industry with £3.1bn of financing since 2005 and in one case loaned £127m to Bumi Resources, owner of Indonesia’s biggest coal mine and 29% owned by London-listed Bumi plc created by Nat Rothschild.

The firm’s Kaltim Prima Coal project has resulted in many people losing their land, with one indigenous village, Segading, having been displaced three times.

Put in context shares in renewable energy companies listed on the London Stock Exchange were according to recent figures worth just £5bn - or 0.56% of the value of fossil fuel shares listed on the exchange (c.£900bn).

In 2013 Barclays was also the top global financier of MTR coal mining - a practice that in the US has seen the tops of more than 500 mountains blasted off in pursuit of coal - which has resulted in water pollution and the destruction of ecosystems.

While BNP Paribas, JP Morgan Chase, and Wells Fargo have pulled out of MTR, a lead that WDM is calling on Barclays to follow, last year the bank increased its financing of the practice and closed £327m in loan and bond transactions. Collectively the top five UK banks underwrote bonds and shares in fossil fuel companies totalling some £170bn between 2009 and 2012.

As Ethical Performance went to press, news broke of FTSE Group’s new global ex fossil fuels index series.

Global | SRI


3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter