Banks develop code limiting finance to “dirty” power plants

HSBC, BNP Paribas, Crédit Agricole, Standard Chartered and F&C Asset Management have worked with not-for-profit thinktank The Climate Group to develop guidance on financing of new coal-fired power projects. The code sets a mid-term ceiling for emissions intensity levels of 830 gCO2/kWh for new coal-fired plants in developing countries and 550 gCO2/kWh for those in developed economies, outside of which subscribing institutions would not provide finance. The financial institutions involved have and/or will be developing their own policies, in line with the guidance, but it remains to be seen whether others will follow suit. While European commercial banks may consider following suit, this is likely to be a much less palatable for US and Asian banks.