In further confirmation that coal is no longer king on Wall Street, Morgan Stanley and Wells Fargo have joined the list of big banks pledging to cut financing to the industry.
CNN reported that years of pressure from climate activists and the collapse in coal prices have motivated the banks’ shift away from coal. Both Morgan Stanley and Wells announced Monday they would no longer finance mountaintop removal mining nor companies that heavily rely on the controversial technique.
“Climate change poses significant risks to the global economy,” Morgan Stanley wrote in its updated coal policy.
The bank will also decline all financing deals that directly support new or expanded coal-fired power generation plants in the United States and other developed economies unless technology is in place to capture carbon emissions.
Wells Fargo told CNNMoney it “will continue to limit and reduce” credit exposure to coal due to a number of issues, including “market factors.”
“The coal industry is in decline. That’s what is driving this,” said Tim Puls, an equity analyst at Morningstar who covers banks. If there was money to be made, “these banks would still be lending to the industry,” he told CNNMoney.
The Dow Jones U.S. Coal Index has lost 95% of its value since July 2011. A number of coal companies have filed for bankruptcy, including Alpha Natural Resources, Walter Energy, Patriot Coal, and James River Coal.
Bank of America and Citigroup have made similar commitments to cut support for coal mining but according to CNN, JPMorgan Chase and Goldman Sachs, two of the banking industry’s biggest players, haven’t gone as far as some of their rivals.