Switzerland, a coal hub with 245 active companies – rts.ch

About 40% of the world’s coal trade is transacted on Swiss soil, according to a Public Eye report to be published on Monday on the sidelines of the opening of COP27. The NGO denounces the laxity of the authorities and banks, which finance these companies. Banks say they are massively reducing their investments.

Coal, energy source from another century? In truth no. According to the Public Eye report that RTS managed to reveal on Sunday night, coal has returned with force in 2022 in the world, driven by the war in Ukraine, the end of the pandemic and the turmoil in energy markets.

This year, coal production is expected to exceed 8 billion tons worldwide, a historic record, according to forecasts by the International Energy Agency (IEA). The fuel, which is mainly produced in China, India and the United States, almost never touches Swiss soil. However, “it is in fact Swiss companies that manage 40% of world trade, making our country a true hub of this fossil energy source most harmful to the climate”, says Adrià Budry Carbó, co-author of the report, Sunday at 7:30 am

According to the NGO count, Switzerland currently has 245 companies operating in the commercialization and extraction of coal. These companies are mainly based in Geneva (78), Ticino (55) and Zug (54). The remaining 58 companies are spread across the country.

Swiss companies extract around 500 million tons of coal a year. They thus generate about 5.4 billion tons of CO2 annually, more than the emissions of the United States. Emissions that are not part of Switzerland’s climate policy.

Financing of 3.15 billion

The Public Eye report particularly denounces the role of Swiss banks, which occupy the 10th place in the world ranking of coal lenders. Since Switzerland’s Paris Agreement (COP21) commitments in 2016, Swiss banks have lent $3.15 billion (the equivalent in Swiss francs) to Swiss companies active in the coal industry, according to data provided by research firm Profundo. In six years, the annual amounts collected increased by up to 72%.

With over CHF 2 billion lent to these companies, Credit Suisse is by far the leader in this market. Its best customers are Trafigura, Glencore and the Russian companies Bibanthracite and SUEK.

UBS follows with CHF 818 million and Zurich Cantonal Bank with CHF 339 million. Reference should also be made to the participation of the cantonal banks of Vaud (92 million), in fifth place, and of Geneva (49 million), in 7th place, whose participation is public.

Credit Suisse recognizes and promises

Contacted by RTS, several banks are surprised by the numbers advanced by Public Eye.

Swiss credit recognizes its share of responsibility and “recognises that financial flows must be aligned with the objectives defined in the Paris Agreement”.

Switzerland’s second-largest bank says it has publicly committed to reducing funded emissions from oil, gas and coal by 49% by 2030 and 97% by 2050. “During the year 2021, we reduced our exposure to coal loans by 39% “, says the bank, which specifies that it does not grant financing to companies that make 25% of their turnover with coal, “unless they support the energy transition”. In 2030, this limit will be reduced to 5%.

UBS also responds to the desire to drastically reduce its fossil fuel commitments: “By 2030, UBS aims to reduce emissions financed by credits granted to companies in the fossil fuel sector by 71% (compared to the 2020 level)”.

“A little part”

In turn, the Cantonal Bank of Vaud (BCV) says he does not recognize the Public Eye results, whose classification does not correspond to his perception. According to its spokesman, the institution does not finance coal mining and most of its financing is transactional.

However, the BCV decided to reduce its commitments in coal trading, which now represents only a very small part of its lending activities. Furthermore, since 2020, the bank has focused on transactions that supply coal to countries most vulnerable to the energy transition. “For these countries coal constitutes an important part of their energy mix and their financial capacities for the development of renewable energies are more limited. The exit from coal is therefore more difficult for them in the short term”, specifies the BCV.

O Cantonal Bank of Geneva (BCGE) She also points out that she does not directly finance the products, but the trading companies that organize the exchanges worldwide. “With regard to financing coal, this represents only a tiny part of our commitments and does not constitute a development axis for the bank”, says its spokesperson.

In the interest of the financial sector

For Sabine Döbeli, Executive Director of Swiss Sustainable Finance (SSF), “the financial sector has clearly identified the financial risks linked to climate change. It therefore has a clear interest in mitigating this risk and supporting ongoing changes.”

According to her, last year’s climate summit in Glasgow sensitized the sector, inviting it to define concrete climate objectives, such as carbon neutrality: “Today there are 27 Swiss banks that have established such objectives. thirds of the market”, she says.

More transparency demanded in Bern

At Bern, we are aware of the financial and reputational risks associated with greenhouse gas emissions. According to information from RTS, the Federal Department of Finance will soon ask multinationals to publish the carbon footprint generated by their activities, as well as the financial risk they may generate.

If the Federal Council’s ordinance comes into force, companies will have to report climate risks and their impacts from 2024 onwards. “If they know where the big risks are, they will also be able to bring about targeted improvements”, says Sabine Döbeli.

For Adrià Budry Carbó, it would certainly be a step forward, but not enough: “Having information is good, but what do we do with it? Companies must now adopt a clear exit plan by 2030. They must be helped by a strict regulatory framework, but also by banks, which must actually stop funding companies active in coal.”

Feriel Mestiri and Nicolas Rossé

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