Financial institutions don’t like the idea of loaning cash to corporations that are just hurting the environment. Mountaintop removal mining is just one of the examples of a business that banks get huge profit financing to, although the business is destructive. Now there appears to be lots of environmental pressure and decisions made in court making it so financial institutions are held responsible for anything that causing the environment destruction that they financed. A growing number of banks are choosing to keep away from environmental risk at the expense of losing business to less scrupulous lenders.
Environmental destruction for banks to lend
It is not that hard for an Environment removal mining company to get its cash. As outlined by the New York Times, bank industry analysts think that climate change debates, standards for water quality and environmental issues are making it so lenders are more concerned where credit is given. Recently Wells Fargo made a statement about “considerable attention and controversy” related to mountaintop removal mining. It described mountaintop mining business funding as “limited and declining.” Credit Suisse, Morgan Stanley, J.P. Morgan Chase, Financial institution of America and Citibank have all made the decision Wells Fargo is making. Most of the banks have decided to stop lending to mountaintop mining businesses. If they didn’t determine that, they decided to reconsider whether or not to lend.
Mountaintop removal mining keeps coal cheap
On Monday, environmentalists from the Appalachian region implored the Obama administration to outlaw mountaintop mining. On September 27, you are able to expect to view a rally by the group where the president was invited, reports the Associated Press. Before getting coal, there is a process. Forests are cleared and Mountaintop removal starts. Then explosives blast apart the rock. Next you have to have a special machine to scoop up 800 feet of mountaintop, but the machine has to be 8 stories high. Coal will be shown then. Streams and wildlife habitats are hurt when the dirt picked up is dumped into valleys. This may be the cheapest way to get coal which gives tens of thousands of jobs to the economy, operators say. The Appalachian coal industry could have a Washington rally of its own on Sept. 15 to protest federal regulations it says remove mining jobs.
Numerous banks excited for making the loans
2007 was when the Rainforest Action Network, or RAN, began its work. It wanted to stop banking institutions from giving any financing to mountaintop removal mining companies. The top mountaintop mining business in West Virginia is called Massey Energy. Because of the RAN efforts, the top four banking institutions in the country have stopped lending to it. In April, 29 miners were killed in an Upper Large Branch mine explosion that involved Massey Energy. But other banks are eager to fill the financing void left behind. According to Bloomberg data, PNC and UBS are at the moment the lead financiers of mountaintop removal mining. PNC is responsible for a ton of coal being used in the U.S. In fact, half of coal from mountaintop mining is financed by PNC.
Further reading
New York Times
nytimes.com/2010/08/31/business/energy-environment/31coal.html?_r=1 and dbk
Associated Press
google.com/hostednews/ap/article/ALeqM5iRFjIvp7yDpMnistp_aolQIRAj_QD9HTVS4O0
Organic Consumers
organicconsumers.org/articles/article_21396.cfm
