Will Banks Ever Stop Financing Mountaintop Removal?
Mountaintop removal (MTR) is a rather nasty form of coal mining which basically blows the top off of mountains in Southern Appalachia. Nine banks examined by a report published in May by the Sierra Club and the Rainforest Action Network provided almost $4 billion in loans and underwriting to companies practicing MTR since January 2008. The nine banks examined by the report are Bank of America, Citi, Credit Suisse, GE Capital Corp, JP Morgan Chase, Morgan Stanley, PNC, UBS, and Wells Fargo.
The report urges banks and financial institutions to “adopt strict lending practices when it comes to mountaintop removal” to prevent environmental and health disasters plus limit “reputational risks.”
There is good news. Three of the banks examined have environmental policies in place regarding MTR. The bank with the best policy is Credit Suisse which received a “Grade A.” Credit Suisse adopted its policy in September 2009, and sent a letter to RAN and Sierra Club which said that it “seeks to promote responsible mining practices that protect the environment, ensure worker health and safety, and engage the public through consultation and disclosure.” According to the report, Credit Suisse does not finance MTR.
The report gave Wells Fargo a “Grade B” for its environmental policy which states that it is incorporate environmental assessments into its credit policies with the coal industry. Although Wells Fargo still finances MTR, it told RAN and the Sierra Club it will produce a publicly available statement on MTR in 2010.
Bank of America received a “Grade C” mainly because its environmental policy adopted in December 2008 stated that it will “phase out financing of companies whose predominant method of extracting coal is through mountain top removal.”
Rebecca Tarbotton, the executive director of the Rainforest Action Network, said in a published statement, “Bottom line, as access to capital becomes more constrained it will be harder for mining companies to finance the blowing up of America’s mountains.” In other words, the recession provides an opportunity for activists to push banks to practice environmentally responsible lending.