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New research looks into the financers of Europe’s worst coal polluter, RWE

Published by , Assistant Editor
World Coal,

As Germany’s coal commission works on a coal phase-out, new research sheds light on the financiers and investors keeping Germany’s biggest coal power company, RWE, alive. It is part of a briefing published by the NGO coalition Europe Beyond Coal and its member organisations, including Urgewald and Sandbag, which provides information about the impacts and financial risks of RWE’s current business strategy.

The research looks at banks that have issued loans and underwriting services for RWE and investors that are holding stakes in RWE. It covers the period since the UN Paris Climate Agreement was signed from 2016 until 3Q18.

It finds that Deutsche Bank is RWE’s most important bank and has issued €1.43 billion in loans and underwriting services, followed by Goldman Sachs with €1.39 billion. BNP Paribas issued more than €900 million and Credit Suisse close to €900 million. On the investor side, despite its claims that “coal is dead”1, the US-based asset manager BlackRock has invested almost €1.8 billion in RWE. Norway’s Government Pension Fund with €530 million and Vanguard with €510 million rank number two and three.

The briefing shows how by contrast other investors, insurers and banks like Allianz, AXA, ING and ABN Amro already have coal policies in place that exclude RWE. Katrin Ganswindt, Coal Campaigner at Urgewald, says: “The divestment from coal has become a new standard for responsible banks and investors. However, some of the world’s biggest banks and asset managers still ignore their role in coal’s damaging impact on health and climate. Even the Norwegian Pension Fund, praised in 2015 for its coal divestment, has not yet quit its relationship to Europe’s No. 1 CO2 polluter. People suffering throughout Europe and around the world expect them to end their support.”

RWE is Europe’s biggest single CO2 emitter. To respect the temperature limits of the Paris Agreement, RWE would have to shut down its coal plants in most cases 15-20 years earlier than planned, 2 stop its mining expansion and cancel its plans for a new coal power plant.

Kathrin Gutmann, Campaign Director of Europe Beyond Coal, says: “By seeking to exploit its coal business to the maximum RWE is taking a risky gamble with investor money. When the German parliament decides on a coal phase-out, RWE is forced to take losses. Taxpayers as well as RWE financiers will pay the bill. This is why the Norwegian asset manager Storebrand already considers RWE shares to be ‘toxic’. This is a last call for creditors and investors to stop supporting such an irresponsible business.”

Charles Moore, Analyst at Sandbag, comments: “This report reveals the extent to which major financial institutions are still propping up RWE, Europe's largest emitter. Sandbag has already reported on the drop in RWE's share price from the debacle as they tried and failed to raze Hambach forest to expand their coal mine. RWE’s financial backers should be aware that as long as the company clings to coal - incidents like this are likely to become the norm.”

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