Goldman Sachs rules out finance for thermal coal mines, power plants

Goldman Sachs has ruled out direct finance for new or expanding thermal coal mines and coal-fired power plant projects worldwide, as well as direct finance for new Arctic oil exploration and production.

The policy makes a clear mention of protecting the Arctic National Wildlife Refuge. Further, the bank has also committed to a phase-out of financing for significant thermal coal mining companies that do not have a diversification strategy, said Goldman Sachs. This new policy by one of the world's largest financiers, tightens the screw on thermal coal by including underwriting, and explicitly committing to phase-out, not just reduction.

This is a crucial step forward, as other US bank coal finance restrictions have geographic loopholes, industry watchers said.

While other major US banks have committed to reducing credit exposure to coal mining, their approach restricts only lending, ignoring the large amounts of capital the banks facilitate for the coal industry from the underwriting of issuances of stocks and bonds. Jason Opeña Disterhoft, Climate and Energy Senior Campaigner at Rainforest Action Network (RAN), said Goldman Sachs’s updated policy shows that US banks can draw red lines on oil and gas, and now other major US banks, especially JPMorgan Chase –– the world’s worst banker of fossil fuels by a wide margin –– must improve on what Goldman has done.

“The writing was already on the wall for coal financing. Goldman Sachs’s new policy puts that writing in flashing neon,” he added.

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