A new year is around the corner. Time to make some predictions about how financial institutions will respond to the growing threat climate change, stranded assets, and eroding social license will pose. 🧵
(1/n) The financial exodus from coal accelerates: There are now 116 globally significant financial institutions with a coal policy. In 2019 over 35 new or improved policies were announced. In 2020 > 40 new or improved policies will be put in place ieefa.org/ieefa-update-g…
(2/n) UK banks dirty coal secret ends: Since Paris UK banks have lent 25 billion to global coal expansion. The UK hosts #COP26 and won’t want a skunk at the Garden party. In 2020 @HSBC @StanChart @RBS & @Barclays will revise policies to end coal 💵google.com/amp/s/unearthe…
(3/n) Coal becomes *nearly* uninsurable: 19 of 116 global coal policies come from insurers. Four US insurers announced in 2019 alone. In 2020 the next giants - @AIGinsurance @LloydsofLondon - will join the party leaving East Asia as insurer of last resort insureourfuture.us
(4/n) Worlds largest coal investor ditches the blackrock. With $17 billion in exposure @blackrock faces reputational risk as coal policies become a minimum for climate cred. Pressure is mounting & Engagement alone won’t cut it. In 2020 they restrict coal coalexit.org/sites/default/…
(5/n) Central Banks restrict coal: Stress tests alone won’t pass muster as climate action. In 2020 CB’s will limit 💵 to fossils starting w/ coal on their own balance sheets. One or more of @DNB_NL @ecb @bankofengland @SNB_BNS_en @banquedefrance will lead google.com/amp/s/www.gree…
(6/n) Fossil fuels become the new coal: Financial institutions have made coal a unique ‘bad’ a-la asbestos or tobacco. In 2020 that will expand to all fossil fuels w/the number of FIs w/ a coal policy that expands to all fossil fuels (see @EIB) growing google.com/amp/s/amp.theg…
(7/n) The worlds largest financer of fossil fuels finally shifts. @Chase is the worst of the worst. With @GoldmanSachs announcing a new policy and other American banks eyeing ‘Paris + 5’ #COP26 as the time to clean up expect Chase to move in 2020 google.com/amp/s/thinkpro…
(8/n) Japan & South Korea End overseas coal 💵. These 2 countries risk becoming int’l pariahs if they continue to be the #2&3 financiers of coal overseas. W/2020 olympics in Japan, P4G summit in Seoul & @antonioguterres pressure they’ll finally act in 2020 google.com/amp/s/amp.ft.c…
(9/n) A Democrat will win the Whitehouse with an aggressive climate policy that includes financial regulation. When they do they’ll rely on Dodd-Frank, FSOC & Fed to implement restrictions on fossil 💵 w/guidance from advisors like @steelewheelz @FinGregg google.com/amp/s/www.bloo…
(10/n) Divestment Gets Material: To be fair this is already true. Goldman Sachs believes divestment was a key driver of the 60% de-rating of US coal co’s. In 2020 total divested AUM grows from 12 to $14 trillion & AUM using coal exit list grows to $12 T google.com/amp/s/amp.theg…
(11/n) Cost of Capital Rises: This has already happened for Coal with hurdle rates as high as 40% according to Oxford researchers. In 2020 expect deep water and other ‘extreme’ oil plays to close that gap as oil is treated a lot more like coal by investors oxfordenergy.org/publications/e… 
(12/n) France sets the global bar for Paris aligned coal policies: The French govt warned FI’s they need new policies by mid ‘20 or else. @AXA responded w/ world leading policy. In 2020 *all* French FI’s follow defining Paris aligned policies for the world beyond-coal.eu/2019/11/27/axa…
@AXA (13/n) Passives Problem goes mainstream: Index investing is setting the world economy on autopilot & driving us towards a cliff w/ 🔼 fossil fuel 💵 🔽 investor action/accountability. In 2020 climate heads finally wake up to the implications, demand action sunriseproject.org.au/wp-content/upl…
