Banking Giants Develop 'The Carbon Principles'
Citi, JPMorgan Chase and Morgan Stanley formed The Carbon Principles to help lenders evaluate the regulatory and financial risks of greenhouse gas emissions. The group hopes the principles will serve as a framework will be adopted by the banking industry.
Under the principles, financial institutions will encourage energy efficiency for potential clients, as well as cost-effective renewable energy projects. The principles also call for banks to promote carbon capture and storage technologies.
The announcement comes in the wake of recent rejections of conventional coal-fired power plants in Kansas, Florida and other states. The principles don't forbid banks from financing conventional coal-fired projects, but instead places such projects under additional scrutiny.
The three banks drafted the framework with participation from industry, such as American Electric Power and NRG Energy, as well as non governmental organizations, such as Environmental Defense and Natural Resources Defense Council.
"Leading utilities and financial institutions understand that the rules of the road have changed for coal," said Mark Brownstein, managing director of business partnerships for Environmental Defense. "These principles are a first step in facilitating an honest assessment of electric generation options in light of the obvious and pressing need to substantially reduce national greenhouse gas pollution."
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