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In Tuesday’s post about Staples terminating a relationship with an environmentally suspect paper supplier, Jeffrey noted that “the potential cost (to business) of failing to be responsible or transparent… can be high indeed.”
Apparently some of the biggest financial firms agree. A couple of days ago, Citi, JPMorgan Chase and Morgan Stanley announced that they’ve developed a new set of standards by which investors can assess the regulatory and financial risks of coal-related projects. The firms hope that these so-called Carbon Principles will become a framework that the entire investment community can use to encourage “responsible” coal development, which is probably one of the larger oxymorons you’ll encounter today. As GreenBiz notes, the new standards don’t forbid investment in coal-burning schemes, but they do place them under additional scrutiny. They’re also voluntary, which means any bank is quite free to ignore them as Bank of America, perhaps the largest financer of coal plants, seems so to be doing judging by its conspicuous absence from the proceedings so far.
So while this is not exactly another nail in coal’s coffin, it’s certainly another hammer blow or two on those nails already there. It sends the clearest message yet to the investment community that there’s a growing risk in projects that generate carbon dioxide and that, as Jeffrey says, the potential costs of failing to be responsible can be high. Clearly the landscape is changing and clearly climate crisis concerns are (finally) penetrating the halls of financial power.