October 6, 2015 / 5:15 PM / 4 years ago

UPDATE 1-Citi accelerates pullback from exposure to coal mining

(Adds comment from Rainforest Action Network)

LONDON, Oct 6 (Reuters) - Citigroup has joined the retreat by investors and lenders in the coal sector by further tightening its policy on its credit exposure to coal miners.

A spokesman for Citi confirmed the U.S. bank was broadening its guidelines for reducing its credit exposure to encompass all types of coal mines.

Since 2011 Citi had already limited its credit exposure to the more controversial mountain top mining, used on a limited basis by the U.S. coal industry, whereby tops of mountains are blown up with explosives to mine underlying coal.

“This new policy reflects our declining exposure and our continued commitment to managing environmental and social risks and opportunities associated with client transactions,” said a spokesman for the bank.

Citi’s move followed Australia’s ANZ Banking Group announcing plans earlier this week to strengthen due diligence processes to lending to coal mining, transportation and power generation.

Divestments in the coal industry have snowballed recently with Norway’s parliament also voting to reduce coal investments by its $880 billion sovereign wealth fund and Stanford University and the University of Maine making similar moves.

Coal remains the world’s top fuel for power generation but environmental concerns have dogged the industry in recent years and limited investor appetite.

The Rainforest Action Network (RAN), one of the groups that pressured the bank on this issue, said that they were “encouraged” by the move.

“With Bank of America, Credit Agricole, and now Citigroup withdrawing support for coal mining, this announcement shows major momentum away from financing coal by the banking sector,” Lindsey Allen, Executive Director of RAN said. (Reporting by Sarah McFarlane; Editing by David Evans)

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