The New York Times is reporting that major multinational banks are growing weary of delivering debt to industrial extraction projects, such as mountaintop removal coal mining in West Virginia.
The piece looks at a recent policy shift by Wells Fargo in providing financing for coal projects:
“In the most recent example, the banking giant Wells Fargo noted last month what it called “considerable attention and controversy” surrounding mountaintop removal mining, and said that its involvement with companies engaged in it was “limited and declining.”
Apparently Wells Fargo has been a relatively small player in the sector ($78 million in bonds and loan financing since 2008 according to the Rainforest Action Network). However, HSBC, Citibank, Credit Suisse, Morgan Stanley, JP Morgan Chase and Bank of America have begun demanding greater environmental impact disclosure from potential mining customers.
While there’s no doubt increased due diligence in mining deals has something to do with flat oil prices over the past year, environmental risk assessment is becoming a material piece of financial risk assessment. This is a leadership position for banks trying to appeal to the SRI community.
Image Credit by Chuck “Caveman” Coker via Flickr under a CC license
