On Coal and Capital: Demand that HSBC Quit Coal
March 15, 2016
This month, for the first time in recorded history, average temperature in the northern hemisphere breached 1.5°C above the pre-industrial baseline. This is the kind of data point that scientists treat as anomalous, but which threatens to become the new normal. January and February were the warmest months ever, and 2016 shows every sign of breaking records, just like 2015 before it.
There is no doubt that humanity is the primary force driving climate change, and almost everyone arguing otherwise has a stake in the game. But the anthropogenic nature of the problem does not mean that everyone is equally guilty. The profound injustice of climate change is that the people most vulnerable to its ravages are those with the least historical responsibility: much of the global south, small island nations, African countries susceptible to drought, indigenous peoples, the international working class, and of course, future generations.
In fact, it is a particular set of people, structures, and institutions that produce climate change. At the beating heart of this nexus lies the fossil fuel industry, concerned only with its bottom line and absolutely rapacious in its extraction of natural resources. In no case is this more true than for King Coal, the single greatest source of carbon emissions. Even the weakest climate mitigation scenarios demand that we leave at least 80% of coal in the ground, particularly in the global north, but private and state-owned companies alike have nevertheless expanded coal production massively since the turn of the century.
In every sense, coal is the most destructive source of energy. Coal mines decimate vast tracts of land, deplete water sources, and are often only made possible through the forcible displacement of communities, whose free, prior and informed consent may never have been sought. Workers are exposed to toxic environments, subject to poor working conditions, and regularly killed in explosions. At every stage of the coal cycle, air quality is drastically impaired, resulting in hundreds of thousands of premature deaths. This industry, so evidently anathema to human life, seeks to redeem itself through disingenuous claims that they are essential for alleviating global poverty. This is a complete smokescreen; decentralised renewable power based in and controlled by communities is cheaper, cleaner and infinitely more democratic. If ever coal was a progressive force, that time is gone.
But to focus exclusively on the extractive industry itself would be to ignore the most significant players. I’m talking about global banks, who fork out the capital which enables coal projects in the first place. They do this through various financial mechanisms, notably lending and underwriting. And it’s a small cabal; just 20 banks provided almost three quarters of all coal finance in the period from 2005 to 2014. Incredibly, the trend has been one of increasing support for coal year on year, rather than a steady withdrawal from an industry in structural decline. This demonstrates just how reliant coal is on commercial banks to sustain its dirty exploits. And if we can slam the brakes on this flow of capital, we can devastate an essential lifeline for companies engaged in coal extraction.
Even by the metric of profitability which guides the (very visible) hand of investment banking, supporting coal is foolhardy. Just last year, in a report on stranded assets (the resources which will be left in the ground as a result of either regulation or economic inviability), London-based bank HSBC recognised coal as facing the ‘greatest regulatory risk’ and highlighted the imperative of divestment. Strange then, that as a reputedly risk-averse bank, HSBC have nevertheless sunk $8 billion into coal since 2005, and continue to ignore their own advice. Together with RBS and Barclays, they have been instrumental in making the UK the third biggest source of coal finance.
But where has all that money gone? One answer is Colombia, where HSBC is up to its neck in coal financing, and from which the UK imports a third of its coal. Between 2009 and 2013 HSBC stumped up £3 billion for Anglo American, BHP Billiton, and Glencore, the three companies behind the notorious 70000 hectare Cerrejón coal mine. A few weeks ago the village of Roche, which lies in the path of the mine’s inexorable expansion, was brutally evicted by police, in a clear sign of state collaboration with the Cerrejón Coal corporation. HSBC also has a long-standing relationship with Drummond, a US company with two coal mines in Colombia, whose rap sheet includes sponsoring paramilitaries to murder trade unionists in order to crush a strike. This is just the tip of the iceberg.
Throw into the mix the fact that HSBC are in the business of reviewing their Mining and Metals Sector policy, which will replace their toothless 2007 document, and you’ll understand why we’ve set our sights on them with our latest campaign, Quit Coal. This changes tack from our previous Divest campaign, which exposed the scale of UK banks’ investments in fossil fuels and empowered people to move their money. This time, we’re targeting a particular bank and making a specific demand: namely that HSBC quit coal, and enshrine this commitment in their new Mining Policy. Just in case they need help formulating that, we’ve broken it down into three easy bites (see below).
So first and foremost, email Stuart Gulliver, HSBC’s head honcho, and express these demands yourself. And please share this blog, because we need all the support we can get!
We will use these blogs to develop the campaign, expanding on the intersection between international finance and coal, investigating coal mining projects and coal companies’ activities in which HSBC is complicit, revealing stories of community resistance to coal-based extractivism, and probing themes like colonialism, just transition, and post-extractivism. Make sure to subscribe to our email list for news, analysis, and future calls to action.
If you have any questions, are interested in writing a guest blog, or even want to collaborate on actions (for example, at HSBC’s AGM on April 22nd 2016), email me on firstname.lastname@example.org!