Cutting off financial flows to the coal industry

Phasing out investments in the coal industry
DKK 3,199,923
Programme Area
Sustainable Finance

Coal is the number one driver of climate change, and phasing out investments in the coal industry is the single most important step financial institutions can take to protect our climate.

With the Global Coal Exit List (GCEL), Urgewald aims to ensure effective divestment through providing financial institutions with a better understanding of the coal industry. The database now has more than 400 financial institutions as registered users, representing over USD 14tr in assets, using the GCEL’s criteria to exclude coal companies from their portfolios. This is significant, as the GCEL reports a total of 935 companies, which the finance industry needs to blacklist if it is serious about fulfilling the Paris goals. Of those, 437 companies are in expansion mode, planning either new coal plants, new coal mines or new coal transport infrastructure, with less than 25 companies on the GCEL having adopted a coal phase-out date.

The GCEL has thus become a powerful information tool and has played an influential role in shaping new policies by financial institutions on coal. The value of the GCEL is that it makes all companies operating along the thermal coal value chain visible to the financial sector. It clearly identifies which companies are still developing new coal assets and offers reliable and transparent data with which financial institutions can phase out coal-based business from their portfolios.

Urgewald is a German environment and human rights NGO, founded in 1992, whose goal is to establish strong environmental and social standards for the international finance industry. A special trademark of Urgewald’s work is the combination of in-depth research, media outreach and public campaigning. In 2015, it played a key role in moving two of the world’s largest investors - the Norwegian Government Pension Fund and the German insurance company Allianz to divest from the coal industry. These are up to now the world’s two largest coal divestment actions. These two successes inspired Urgewald to begin compiling the Global Coal Exit List, first launched in 2017 and updated each year.

About the database:

  • The GCEL includes the entire thermal coal value chain in its data sets and therefore provides a much more accurate picture of companies’ dependence on coal-related business and therefore also of the resulting financial risks for investors.
  • The GCEL is free and publicly available to anyone: companies, civil society organisations, journalists and academics.
  • The GCEL is forward-looking and identifies which companies are expanding their coal mining activities, developing new coal power plants or building other coal-related infrastructure.
  • Unlike most other coal databases, the GCEL also provides data on many private companies that is otherwise hard to access, especially relevant for banks and insurers.
"The GCEL is a one-of-a-kind resource for investors and financial institutions that want to understand and manage climate risks in their portfolios."
Peter Cashion, Head of Climate Finance at IFC