RBI initiates the exit from coal
Posted On March 16, 2021
Raiffeisen Bank International (RBI) is now serious about phasing out coal. By the end of 2030, the bank aims to have reduced its coal financing to zero. Existing customers who still earn money with coal only have until the end of 2021 to present a plan on how to switch to more climate-friendly forms of energy. New business in this area will be discontinued with immediate effect.
“We want to end the business with companies that earn more than 25 percent with coal,” said RBI corporate customer board member Peter Lennkh to the APA. With immediate effect, new power plants or coal mines should no longer be financed. In the “RBI Sustainability Report” from 2019 it was said that new business should be avoided with customers who generate more than 50 percent of their sales in the thermal coal sector.
The new rules apply to the entire RBI Group, including all subsidiaries in the CEE region and in Russia. The bank has been working on the new coal policy since the beginning of 2020, and a decision on the new guidelines has now been made in the Board of Directors.
At the end of 2020, RBI’s coal business was EUR 1.4 billion, according to its own information, which corresponds to around 0.65 percent of the bank’s total liability, which includes all corporate, private and financial loans as well as obligations from guarantees. This sum is now being “matured” until it should be zero by 2030 at the latest.
At the same time, RBI wants to increase its sustainable business (ESG / Environment, Social, Governance). By 2025, around a third of all Austrian corporate loans should be in the ESG area. It is currently around 10 percent, said Lennkh. The loan volume is to be expanded in the area of wind and solar technologies, among other things, but the aim is generally to diversify the financing of ESG projects. RBI also has a lot of experience with green bonds and wants to continue to be very active in this business. With a volume of 1.3 billion euros, the bank is currently Austria’s largest green bond issuer.
Erste Group announced its coal phase-out strategy last week. It gives its existing customers more time for an exit plan than RBI, namely until 2023. Although Raiffeisen is pulling the reins much tighter here, it is also primarily relying on accompanying existing customers during the transformation and on dialogue. “Now the dialogue with the customer begins. Then it is also up to the customer to decide whether he wants to work with us,” says Lennkh.
Lennkh estimates that the biggest construction sites with regard to the coal phase-out are the subsidiaries in the Czech Republic and Russia. Lennkh is well aware that the topic of energy security continues to play a major role in Eastern Europe and that many countries will be dependent on coal for an even longer period of time. However, the bank does not want to deviate from its guidelines. If a company does not manage to meet the new standards, then “we will not be able to work together,” said the corporate client boss. There will continue to be other banks that do not impose such tough policies as the RBI.