PNC Bank: Helping to Destroy Mountains
PNC Bank: Helping to Destroy Mountains
PNC, a big regional bank (annual revenues: $16 billion) based in Pittsburgh, has become the bank that environmental activists love to hate because of its support for mountaintop removal mining.
The bank was identified as the worst of the worst in Grading the Banks: A Mountaintop Removal Scorecard, a new ranking compiled by the Rainforest Action Network and the Sierra Club.
According to the report, the bank has made loans to six companies engaged in mountaintop removal (MTR) mining: Massey Energy, Patriot Coal, Alpha Natural Resources, International Coal Group, Arch Coal and Consol Energy.
PNC, by the way, was a recipient of TARP funds (since paid back) so these loans were, at least in a small way, your tax dollars at work.
I emailed PNC to ask for their comment and got a prompt reply from Fred Solomon, vice president, corporate communications:
PNC’s practice is not to comment on analyst or other research reports, and in general, our credit policies are proprietary information.
Interesting. We’ll see how long that no-comment approach lasts, if any of the enviro groups decide to bring pressure directly on PNC, a major consumer bank in the mid-Atlantic region. Transparency, evidently, is not for now part of the PNC culture.
I’m returning to the topic of banks and coal after just a couple of weeks (See J.P. Morgan Chase’s Coal Problem) because of a couple of significant new developments. The first is the RAN/Sierra Club report card–a tactic that, in the argot of the corporate campaigns, is known as “rank ‘em and spank ‘em.” The second is a new policy by JP Morgan Chase, released just before the bank’s annual meeting, which was held today.
In the report card, RAN and Sierra Club looked at nine financial institutions, and gave them letter grades from A to F, based on their MTR lending policies and publicly-known practices. Companies ranked, from top to bottom, were Credit Suisse (A-), Wells Fargo (B+), Bank of America (C), Morgan Stanley (C), Citi (C-), JP Morgan Chase (F), GE Capital (F), PNC (F) and UBS (F).
About PNC, the report said:
PNC does not appear to have a robust environmental policy and has not responded to our communication. A review of their website shows no evidence of a CSR or environmental staff team covering their commercial lending and investment banking business.
UBS, the big Swiss bank, also has no specific policy on MTR.
Amanda Starbuck of RAN told me: “They (PNC and UBS) both seem to be picking up business from coal clients that others won’t touch.” She said that, to the best of her knowledge, neither RAN nor Sierra Club has plans to target PNC, but she noted that the Earth Quaker Action Team (cool name!), a new group of “Friends and friends of Friends” based in the Delaware Valley around Philadelphia, has begun a campaign of nonviolent direct action aimed at PNC.
The group staged a silent vigil last month outside a PNC brank in Philly to mourn the deaths of 29 miners in the Upper Big Branch mine owned by Massey Energy. (Massey, by the way, held its annual meeting today, too, attracting hundreds of protestors and shareholder opposition to the re-election of three directors.)
Earth Quaker Action Team says this about PNC:
PNC is the fifth-largest bank in the U.S. in terms of deposits, and makes money from its involvement with mountain-top removal coal companies. PNC also portrays itself as a “green bank” because of its building practices.
This is one of those places where climate change meets economic justice, where the profitable exploitation of people and nature hurts locally and globally, by pushing more carbon into the atmosphere. PNC Bank can choose a different kind of escalation. Instead of supporting the war against people and nature represented by mountain-top removal, it can escalate its own commitment to green practices, going beyond vegetated roofs on its local branches to cleansing itself from financial dealings with coal companies.
Meanwhile, JP Morgan Chase published its first policy on MTR in its 2009 corporate responsibility report (available for download) released this week. Several paragraphs are devoted to MTR, saying, among other things that the bank does an “enhanced review of all proposed banking transactions for companies engaged in MTR,” that the bank supports the Obama administration’s review of MTR rules and that
As the public record reflects, in 2009, JPMorgan Chase did no financing for any company with significant MTR operations.
RAN’s Amanda Starbuck calls this a step forward, although the overall policy (like those of most banks, as I reported here) is “quite fuzzy, quite woolly.” She’d probably raise the bank’s grade from F to D, she told me.
Interestingly, without saying so directly, JP Morgan Chase appears to have backed away from financing Massey Energy. It was the lead manager, with UBS, when Massey borrowed money in 2008, but did not participate (although UBS did) when Massey returned to the market in March.
“It is very clear they have dropped Massey as a client,” Starbuck says.
Is there a business case for banks to avoid lending to coal companies? While public opposition to both MTR and new coal plants appears to be growing, Americans will be burning coal to make electricity for a long time. Coal-fired power plants currently account for about 50% of our electricity. To put this in personal terms, roughly half of the 1,000 words in this blogpost are coal-powered, maybe more depending on what my local utility, PEPCO, is doing today.
But if the reputational costs of burning coal and financing MTR or new coal plants continue to grow, that will help persuade banks and utilities to invest in cleaner forms of energy–natural gas, nuclear power, wind and solar.
That’s what RAN and the Sierra Club hope to accomplish, and they appear to be gaining ground.
GreenBiz.com Senior Writer Marc Gunther is a longtime journalist and speaker whose focus is business and sustainability. Marc maintains a blog at MarcGunther.com. You can follow him on Twitter @marcGunther.
Mountain photo courtesy of flickr.com/photos/sierraclub/2825430279/
Billboard photo courtesy of flickr.com/photos/quinnanya/3392446245/