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Tuesday, August 31, 2010

Local bank benefits from lack of environmental interest

Posted By on Tue, Aug 31, 2010 at 12:46 PM

Today's Post-Gazette carries a reprint of a New York Times story about how banks are becoming increasingly wary of financing environmentally destructive mining practices like mountaintop removal. 

As the story puts it:

Blasting off mountaintops to reach coal in Appalachia, or churning out millions of tons of carbon dioxide to extract oil from sand in Alberta are among environmentalists' biggest industrial irritants. But they are also legal and lucrative.

For a growing number of banks, however, that does not seem to matter.

After years of legal entanglements arising from environmental messes and increased scrutiny of banks that finance the dirtiest industries, several large commercial lenders are taking a stand on industry practices that they regard as risky to their reputations and bottom lines.

The story notes how numerous banks -- including Wells Fargo, Bank of America, and Morgan Stanley -- are taking a second look at mountaintop removal. Some are refusing to finance mining enterprises that use the practice, like Massey Energy. 

What neither the P-G nor the Times says is that among the banks who haven't stopped financing mountaintop removal is our very own PNC. And in fact, PNC is the target of considerable environmental ire. 

Both stories note a report issued in May by the Sierra Club and the Rainforest Action Network, studying nine banks that were "the primary lenders  for firms engaged in mountaintop removal mining in Appalachia." That report identifies PNC as the top financier of the practice, and gives it an "F" grade for lacking a publicly available policy on scrutinizing the practices environmental merits. (The bank apparently did not respond to the environmentalists' requests for information.) 

This should come as no surprise to anyone who was Downtown during last year's G-20, or to readers of this blog. Actually, come to think of it, it's hard to say which of those audiences would be smaller, so let me revisit the story.

Back in September, one of the lesser-noted demonstrations attending the global economic summit was staged by environmentalists upset at PNC's backing of mountaintop removal. The bank has a policy of not discussing its clients' business, so they didn't exactly confirm the accusations. But it's not hard to find evidence of its numerous financial dealings with companies like Massey Energy. Our very own Charlie Deitch wrote a follow-up story based on environmentalist complaints a few weeks after the summit wrapped up.

At that time, the Rainforest Action Network told us that although PNC's influence cropped up in "an awful lot of our documents as having ties to ... mountaintop removal," the bank was "not one of the top 10 banks that we are looking at." 

Since then, as other banks have scaled back their lending, PNC's profile has only grown. As the folks at the Rainforest Action Network said in a press release just a few days ago:

[E]ven as the nation’s largest banks have severed ties with Massey Energy, owner of the Big Branch Mine in West Virginia, where an explosion in April killed 29 workers, PNC has maintained its financial support of the embattled company...

Over the past two years, Bank of America, Citibank, JPMorgan Chase, and Wells Fargo– the four largest banking institutions in the U.S. – have all adopted enhanced environmental review procedures for financing MTR mining and construction of coal-fired power plants ... None of these banks currently provide funding to Massey Energy, according to the Rainforest Action Network and the Sierra Club.

Yet according to RAN, PNC has become the largest U.S. financier of [mountaintop removal] mining companies, providing $500 million in loans and bond underwriting to the coal industry, with an estimated $80 million going directly to MTR mining operations in Appalachia.

PNC has issued a statement boasting of its environmental sensitivity, but as we noted last year, its focus is almost entirely on green building practices. There's some nice stuff about office recycling policies too, which is great. But neither in discussions with City Paper nor in statements elswhere, have I heard the bank really address the issue head on. 

Then again, hardly anyone has asked. A Google search of "PNC" and "mountaintop" turns up no shortage of environmental groups decrying the bank's role ... but in the Post-Gazette, I find only two relevant stories connecting the words. One dates back to the G-20, and says nothing about the bank's role in the process. The other, ironically, is a story about how online activism doesn't always change corporate behavior. PNC's role is mentioned briefly, about halfway into the piece; the paper doesn't dig into the accusations, nor is PNC called upon to respond to them:

There also is a push on to pressure PNC Financial Services Group to avoid lending to companies involved in mountaintop removal mining. A recent report by the Rainforest Action Network and the Sierra Club criticized the Pittsburgh bank for being active in the business but not having an investment policy to address the issue, unlike Credit Suisse, which the group said adopted a policy last fall to "promote responsible mining practices that protect the environment, ensure worker health and safety, and engage the public through consultation and disclosure."

There's been some blogging about the issue and a couple of demonstrations, enough to associate the topic with the company's name on an Internet search.

Coverage in the Tribune-Review appears to be no better, but what stands out about the P-G is that its coverage of Massey Energy -- the recipient of that PNC financing -- has been fantastic. (It was, for example, recently lauded by the New York Times editorial page.) But while the P-G has been very aggressive about pursuing Massey, it has asked nary a question of the bank next door. And while the paper regurgitates a Times story about all the banks around the world that have stopped funding Massey ... it has devoted no effort to talk to the local bank continuing with business as usual.

Which, when you think about it, is a little conspicuous.

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