The world's largest coal mining companies need to show how they will reduce their carbon
emissions to meet global climate targets under the Paris accord, according to an investor-backed
group led by the Church of England.
Only two of the 20 largest listed coal companies-Rio Tinto and Brazil's Vale-have
long-term targets for reducing their emissions, according to a report published on Tuesday
by the Transition Pathway Initiative, a coalition of investment funds with £34tn under management.
Three coal companies, DMCI Holdings, Inner Mongolia Yitai Coal, and Shougang Fushan
Resources Group, do not even acknowledge climate change, the study said. The report comes
after the Paris climate change agreement to limit global warming to below 2 degrees Celsius
above pre-industrial levels came into effect last November.
"We still need to be able to assess the future carbon reductions of these companies against
the globally agreed 2 degree pathway," said Adam Matthews, head of engagement for the
almost $10bn of pension and investment funds of the Church of England.
While many large investors have shunned coal, shares in producers have returned 38 percent
over the past year, according to the VanEck Vectors Coal ETF.
Benchmark Australian thermal coal prices more than doubled in 2016 and briefly rose above
$100 a tonne after China imposed curbs on its domestic producers.
While demand for coal is declining in the developed world, it is not likely to peak in China until
2026, according to Bloomberg New Energy Finance. Coal will still make up 30 per cent of the
power-generation mix of the country in 2040, the research group said in a recent report.
Greater transparency on action by mining companies could help investors and index providers
better judge which companies were dealing with climate change, rather than avoiding coal
companies altogether, said Jon Samuel, head of social performance and engagement at Anglo American.
The study, conducted by the London School of Economics and Politics, tracked companies through
five levels based on 14 questions related to climate change. Only three companies made it to
the top level, Anglo American, BHP Billiton and Rio Tinto, but none of them met all of the criteria
in that top level, it said.
In addition, only seven out of the 20 largest listed coal mining companies reported the emissions
from the downstream burning of their coal, so-called lifecycle carbon emissions.