Wells Fargo & Co (NYSE:WFC), the fourth-biggest U.S. bank by assets, Morgan Stanley (NYSE:MS), the sixth-biggest, released a new policy statement today said that Wells Fargo and Morgan Stanley would hold back investment to global coal industry. Wells Fargo committed to reduce the bank leading to coal mining industry. Morgan Stanley also committed to reduce the underwriting for the global coal industry and stop financing for coal-fired power plant construction in developed countries.
According to Morgan Stanley’s latest announcements from United Nations summit in Paris where leaders from more than 150 nations are seeking a worldwide agreement to rein in climate change. “We will continue to shift our lending and capital-raising efforts toward cleaner and renewable sources of energy and reduce the proportion of our energy financing to coal mining and coal-fired power generation.”
These policy changes follow other major banks, including Citigroup Inc. (NYSE:C), Bank of America Corp (NYSE:BAC) and many other European banks to cut financing for the global coal industry.
Those banks new policy towards the global coal industry reflects the transition of our economy towards to a low-carbon economy.
However, the coal industry argues it’s an important source of affordable electricity for poor nations; critics have targeted it as the most polluting of the fossil fuels blamed for skewing the Earth’s climate.
Morgan Stanley said any financing of coal-mining companies will now require “escalation and senior approval.” The same requirements will apply to financing that directly supports new or expanded coal-fired power projects in the developing world, according to the statement.