In what is sure to be a growing trend over the next few years, Bank of America announced on May 6 their plans to reduce investments in the coal industry, saying that the industry has become too risky and expensive to continue doing business with.
At its annual meeting, leaders of the corporation announced plans to cut back on lending funds to companies that utilize coal as a main source of energy.
“Our new policy reflects our decision to continue to reduce our credit exposure over time to the coal mining sector globally,” according to Andrew Plepler, the current head of “corporate social responsibility” at the company.
Bank of America follows in the footsteps of churches and colleges and universities to curb business with the coal industry, with a significant role being played by environmental groups, Reuters reports. The continued promotion for new and cleaner energy sources has caused stockholders to fear losing millions in Bank of America stocks linked to the coal industry.
“From these engagements, we have developed a coal policy that will ensure that Bank of America plays a continued role in promoting the responsible use of coal and other energy sources, while balancing the risks and opportunities to our shareholders and the communities we serve,” leaders said.
The Rainforest Action Network Climate, a clean energy advocacy group, was one of the more influential organizations to attack Bank of America for its funding practices. Since Bank of America’s announcement, the group seems to have a different position.
“It [Bank of America] acknowledges the responsibility that the financial sector bears for supporting and profiting from the fossil fuel industry and the climate chaos it has caused,” Amanda Starbuck, the RANC’s program director, said after the announcement was made.
Last year, it was reported that Bank of America gave $1.3 billion to coal-mining corporations, making Bank of America’s contributions one of the highest in the country, The Guardian reported.
The bank is joined by Citigroup and JPMorgan Chase as the biggest lenders to the coal industry. Despite the billions of dollars in the business, the coal industry fell by half in 2011, as cleaner and more environmentally friendly energy supplies grew in favor, Bloomberg reported.
Photo Credit: The Guardian, Business Insider