Banks can accelerate climate action by stopping lending to companies that mine coal or use it for power generation. This policy is called “coal divestment” and would have a direct impact on CO2 emissions because the coal industry relies on large amounts of fresh capital, which it typically obtains from banks.

According to a study by two Harvard Business School professors, if banks no longer lend to coal-fired power producers, their lending will fall by a quarter compared to non-sanctioned companies. Since the coal industry depends on a large amount of fresh capital, which it usually gets from banks, the sanctions have direct consequences: The number of banks investing in coal is currently relatively small – there are simply almost no alternatives. Power producers are forced to close mines and coal-fired power plants and switch to other energy sources, which in turn has a direct impact on CO2 emissions.

Burning coal is responsible for a fifth of all CO2 emissions worldwide and is more harmful to the climate than any other energy source. That is why divesting from coal is an important step in the fight against climate change. Banks can play a key role in accelerating climate protection by engaging in coal divestment and stopping lending to companies that mine coal or use it for power generation.

In addition to divesting coal, banks can also accelerate climate protection by investing in renewable energy sources such as solar and wind power. Banks can also provide loans to companies working on developing new technologies to reduce CO2 emissions, such as carbon storage technologies.

The European Union is also aware of the role of banks in climate protection, and has imposed restrictions on banks' investments in coal. These restrictions are set to come into effect in 2023.

Banks’ divestment of coal is an important step in the fight against climate change. Banks can play a key role in accelerating climate protection by engaging in coal divestment and stopping lending to companies that mine coal or use it for power generation. (AI)