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Three leading US banks will pay more attention to environmental issues when deciding whether or not to finance greenhouse gas-intensive industries from now on. The Carbon Principles, announced this week, are backed by Citibank, JP Morgan Chase and Morgan Stanley, while other banks look likely to follow their lead. One result could be less money for coal-fired power stations and destructive coal extraction methods such as mountain top removal mining.

Environmentalists are campaigning against Britain’s first new coal power station for 24 years. Giant German power company E.ON will build it at Kingsnorth, near Rochester claiming it will be 20% cleaner than the old one. But E.ON is refusing to commit to any expensive carbon capture technology unless the government makes it mandatory. The Carbon Principles call for greater due diligence by banks and utilities in assessing the climate and economic risks associated with the construction of new coal plants.

Shares says: Banks and utilities will pay more attention to environmental issues but new coal fired plants will be built – especially in developing countries – as oil runs out.

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by: Timon Day