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March 21, 2013

Bank of America Urged to End Financing of Coal
    by Robert Kropp

Sustainable investors are among the 50 signatories to a letter delivered to Bank of America, urging it to phase out the financing of coal and shift its lending priorities to renewable energy. -- Earlier this month, the Rainforest Action Network (RAN) published its most recent Coal Risk Update, which documents the adverse impacts to the region around Blair, West Virginia, if Arch Coal goes ahead with its proposed mountaintop removal plan there.

Along with the pronounced social and environmental damage associated with any mountaintop removal project, Arch Coal's proposed Adkins Fork mine would also "destroy the heart of the Blair Mountain battlefield site, which has been acknowledged to be historically significant," according to RAN.

Seven of the nine banks that issued a $250 million loan to Arch Coal for the project are members of the United Nations Environmental Program Finance Initiative (UNEP-FI) and commit to supporting "a precautionary approach to environmental and social issues, which strives to anticipate and prevent potential negative impacts on the environment and society." Several of them are also signatories to the Equator Principles, and commit to managing environmental and social risks in their project finance transactions.

Despite its membership in both initiatives, Bank of America is one of the banks involved in the loan to Arch Coal, and is in fact "the largest financier of the US coal industry," according to a letter delivered to Brian Moynihan, President and CEO of the bank, this week.

The letter, which was signed by 50 financial, environmental, and legal experts and released by RAN, states, "Your bank has significant financial relationships with major coal mining companies, utilities with emissions-intensive coal-fired power plant fleets, and companies that are developing coal export terminals that, if built, will transport millions of tons of coal overseas each year."

The signatories urge Bank of America to phase out its financing of coal-fired power plants, mountaintop removal, and coal export infrastructure. They also recommend that the bank shift its financing priorities to renewable energy.

Among the signatories to the letter are many representatives of sustainable investment firms. "Investors have a clear financial interest in the enduring health of capital markets and the economy," the letter states. "Coal combustion and its links to negative environmental and health impacts present real risks to investors and bolster the argument for stronger protections of public health and welfare."

Susan Baker, Vice President of Shareholder Advocacy & Corporate Engagement at Trillium Asset Management and a signatory to the letter, stated, "Bank of America has a unique opportunity to shift energy financing to support clean, renewable power generation and reduce climate change risks in its operations. Squandering that opportunity shortchanges investors, economic growth and the future of our planet."

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