The PPCA consists of 111 members, including 36 governments and a variety of businesses including BT, Scottish Power and Aviva.
Each member is required to demonstrate their approach to eliminating coal-fired power plants before 2030 for developed countries and 2050 for developing areas, in order to reach the targets set out by the Paris Agreement.
Established in 2017 and led by the UK and Canada, the alliance aims to tackle coal emissions, as the single largest source of global temperature increase.
However, the NGO Reclaim Finance analysed the progresses made by PPCA members and found that the alliance’s declaration and finance principles contained “major loopholes” that “allow its members to satisfy its criteria while remaining important players in the coal sector and, in some cases, even contributing to its development”.
While a member of the PPCA, organisations are still allowed to open new coal plants, coal mining is not included in the declarations and the phase out deadlines do not align with those recommended by the Intergovernmental Panel on Climate Change, says the NGO.
Paul Schreiber, the author of the report, told The Guardian: “The PPCA may be well-intentioned, but it is not fit for purpose. It could be helpful, if done right, but today it is not helpful [to global carbon reductions]. Members are not following up on their pledges. It serves as a greenwashing engine for financial institutions.”
Financial institution members were the worst culprits, with just 2 out of 23 on track to exit coal and 15 not taking “any credible step to reduce their support to the sector”, says the report. Eight of these members, including Aberdeen Standard Investments, do not have any coal policies and most are still able to support companies building new coal assets, it notes.
As of January 2021, Reclaim Finance found that the 23 PPCA financial members had collectively invested more than $38 billion in major coal companies.
Lucie Pinson, founder and executive director of Reclaim Finance, said: “When it comes to the PPCA and its members, it’s clear that talk is cheap. A large majority of financial institutions that joined the PPCA have not taken any measure indicating a willingness to exit coal.
“Worse, 80% of them – including Schroders, ASI, CalPERS and L&G – can continue to invest in many companies building new coal plants, mines and infrastructures. In a nutshell: financial institutions have taken full advantage of the PPCA’s flawed framework and loose monitoring to continue feeding the coal frenzy.”
Despite leading the alliance, the UK is considering a new coal mine in Cumbria and Canada is developing 13 new mines, which according to Reclaim Finance, could cause greenhouse gas emissions which equate to a fifth the annual emissions of France.
A UK government spokesperson told The Guardian: “The UK is leading the world in tackling climate change and phasing out coal, having gone over 5,000 hours without using coal for electricity last year. As part of this commitment, we launched the Powering Past Coal Alliance along with the Canadian government to advance the transition from unabated coal power electricity generation.
“We intend to bring forward our target to eliminate all coal-fired power stations to October 2024, which could mean that in 10 years, the UK would have reduced its reliance on coal for electricity from around a third to zero.”
Paddy McCully, energy transition analyst at Reclaim Finance, said: “As COP26 looms, this is the last chance saloon for the PPCA. If they don’t want the initiative they lead to act as a smokescreen for financial institutions to carry on polluting, the UK and Canada need to give the PPCA teeth so it starts living up to its name. When it comes to powering past coal, there’s no time to lose.”
Global coal production capacity has continued to rise over the last two decades. Coal makes up 38% of global energy production, according to Reclaim Finance.
Read the report here.