Urgewald, an NGO with a long history of urging the finance industry to divest, has created an in-depth database, coalexit, that lists the top 120 companies that are most responsible for future coal plant development around the world. The database will be a powerful tool for use by climate-focused investors, banks, and insurers in the finance industry. In her own words, Heffa Schuecking, founder and director of Urgewald, answers our questions.
What is the main purpose of the coalexit database -- as a research tool or to help investors divest?
The coalexit database reveals which companies intend to expand the world’s fleet of coal-fired power stations. We hope it will be widely used by NGOs and researchers, but the main audience we want to reach is the finance industry. Unless banks and investors change course and stop investing in coal plant developers, it will be impossible to meet the goals of the Paris Climate Agreement.
What made Urgewald focus on the top 120 coal plant developers?
Many investors have begun dropping coal mining companies from their portfolios, but still continue to invest in coal plant developers. These investments are a double whammy as new coal plants create a demand for further coal mines and lock in CO2 emissions for decades to come.
How difficult was it to limit the list to just 120 companies?
Over 600 companies are involved in the pipeline of new coal power projects, but the 120 companies on our list are responsible for 2/3 of these projects. If banks and investors start blacklisting the top 120, this will send a strong signal to all of the players involved. We, however, also plan to expand our research to cover additional companies.
How much research was done to compile the list?
Over the past 2 years, we have been working on a wider research project, which identifies all of the major players in the thermal coal value chain. When we, however, began analyzing the new build pipeline, we realized that coal plant developers are not necessarily traditional coal companies. Around half of the companies on our list derive less than 50% of their revenues from coal. Among these are large diversified corporations such as Marubeni or companies that are just now moving into coal power, but whose traditional business lies in other sectors. All in all, it took about 4 months to complete this research.
Why is there so much focus on 'frontier' countries?
It is very worrying to see the coal industry moving into countries like Egypt. Nigeria, Pakistan or Bangladesh, which have no or very little coal-fired capacity up to now. If we want to limit global temperature rise to 1.5°C, coal power must be phased out as quickly as possible. By bringing whole new countries into a cycle of coal dependency, coal plant developers are putting up huge stumbling blocks to effective national and international climate protection measures.
How effective is coal divestment as a tool?
Divestment can be very effective, but it needs to go beyond coal mining and also cover coal power companies and coal plant developers. When investors take divestment actions, they are doing much than just selling off coal assets. The key impact lies in the fact that they are effectively saying no to all future investments in these companies. The challenge, however, is to get the really big investors and banks to move as they are the key providers of capital to the coal industry.
What is Urgewald's background in divestment? Were previous divestment campaigns successful? How so?
The two most important campaigns Urgewald led in this field were on the Norwegian Government Pension Fund, the world’s second largest pension fund, and on Allianz, the world’s largest insurance company. In 2015, both institutions committed to divest companies that base more than 30% of their revenues or power generation on coal.
What in your background made you want to become an activist?
I think it has a lot to do with my parents. They imparted me with a strong moral compass and the confidence to stand up to the powers that be.
What's next for Urgewald?
Local movements are already challenging new coal plants all over the world. We aim to support them by building an international campaign against the financial institutions that are bankrolling coal plant developers.