Billionaire's campaign to "financially starve" coal plants

A British hedge fund billionaire has launched a campaign to convince central banks to starve hundreds of coal-fired power plants of financial backing with the aim of putting a block on the projects before they begin contributing to the effects of climate change.

Chris Hohn, a major donor to groups working to mitigate the effects of human activity on the environment, spelled out his concerns in letters to the Bank of England Governor Mark Carney, ECB President Christine Lagarde, and the chairs of Barclays, HSBC, and Standard Chartered.

"Coal is the single largest source of greenhouse gas emissions globally and the risks of its continued use in the power sector are not being adequately addressed by regulators and the financial system," said Hohn in a statement on his Children's Investment Fund Foundation (CIFF) charity's website.

The five letters were published on the website on Sunday, as well as an additional letter to the Network for Greening the Financial System, a group of regulators looking to create a system of better supervision of the risks that climate changes poses. The group includes members with large economic stakes in coal including in countries such as Australia, China, Japan and South Korea.

Climate change has moved up the agenda for investors in the past year as account managers have increasingly taken extreme weather into account, as well as possible risks to valuations of oil, coal and gas companies if governments begin cutting CO2 emissions in line with the Paris Agreement's goals.

In the letter to Mark Carney, Hohn said that UK banks were "highly likely" to experience losses on coal financing as the cost of renewables falls and regulations on emissions and air pollution tightens.

Hohn has made a call for a dramatic tightening of the application of a supervisory requirement known as the “risk-weighting” applied coal loans - a move that would make coal plants far more difficult for banks to finance.

He also urged regulators to force banks to publicly disclose their exposure to coal.

In his letters to Barclays, HSBC and Standard Chartered, Hohn urged the banks to reveal any coal exposure on their balance sheets and classify such loans as high-risk. The banks were not immediately available for comment.

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