Wells Fargo and Morgan Stanley are distancing themselves from the coal industry.
The coal industry is continuing to see its financing options go up in smoke. Two more of America’s largest banks – Wells Fargo & Co. and Morgan Stanley – are publicly distancing themselves from coal due to climate change concerns.
Wells Fargo, America’s fourth largest bank by assets, announced plans in late November to cut back its lending to companies in the coal-mining industry. Morgan Stanley, the country’s six-biggest bank, also issued a new policy statement that pledges its commitment to reduce ties with coal mining operations on a global basis. It has also vowed to more heavily scrutinize financing deals that involve coal-fired power plants.
Morgan Stanley’s policy statement acknowledges that “climate change poses significant risks to the global economy and that reducing carbon emissions is critical to our success.” With that in mind, the company has promised to leverage its assets in favor of “low-carbon sources of energy and other sustainable strategies.” Since 2011, the company has mobilized more than $25 billion for renewable energy and clean technologies.
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The Center for Climate and Energy Solutions (C2ES) reports that coal is the third largest primary energy source in the United States. It accounted for 18% of all energy consumed in 2012. Coal has the highest carbon content of all fossil fuels, making it a leading contributor to the greenhouse gases that are driving manmade climate change.
“Carbon dioxide emissions from coal combustion represented 24.5% of total U.S. greenhouse gas emissions in 2012,” the C2ES website states. In addition to adding to greenhouse gases associated with climate change, coal’s other environmental impacts include acidic run-off and mountaintop mining, both of which are associated with poor water quality.
Wells Fargo and Morgan Stanley join a growing list of lenders moving away from coal. Other companies that have vowed to stop support or cut it back include Goldman Sachs, Citigroup and Bank of America. Some of the companies, like Morgan Stanley, have pledged to invest more heavily in renewable energy.
As worldwide concern over climate change continues to grow, everyone can do their part to lower carbon emissions. Even banks are stepping forward to mitigate the effects by pulling support from coal and pledging it toward cleaner energy sources.
