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Friday, December 3, 2010

PNC digs itself out of mining controversy

Posted By on Fri, Dec 3, 2010 at 6:25 PM

Obviously, this past fall has been a tough season for progressive causes. But at least one positive development did take place, though it slipped beneath the radar:

PNC Bank has apparently decided to stop funding mountaintop-removal mining.

As City Paper has noted before, PNC has reputedly been an increasingly important financial backer of the controversal practice, which involves lopping off the tops of mountains, and scooping out the coal beneath. The bulldozed land often ends up being pushed into nearby valleys, increasing the environmental trauma.

PNC has largely declined to comment on the issue, citing the need to protect client privacy. But with little fanfare, PNC released a new corporate responsibility policy this fall. Among its provisions was this assurance: 

PNC will not provide funding to individual [mountaintop removal] projects, nor will PNC provide credit to coal producers whose primary extraction method is MTR. PNC will continue to monitor this industry while various regulatory issues are addressed through legislation and public policy.

The demand for power, jobs and other community impacts associated with coal mining will continue to weigh heavily in PNC’s lending decisions. PNC also recognizes the significant investment coal producers have made in their MTR operations, and acknowledges that these were entered into in good faith and in accordance with all applicable laws and regulations.

Curiously, PNC doesn't appear to be anxious to discuss the matter further, making this one green initiative they aren't boasting about. Hell, they don't even mention the mountaintop ban in their statement of environmental responsibility, which brags about much less impressive initiatives, like using environmentally friendly office supplies. 

The obvious guess here is that PNC is trying to burnish its green credentials without alienating existing clients in the coal industry. (A guess is all this can be, obviously, since PNC won't even identify who its clients are.) As we've reported before, Massey Energy -- a leader in mountaintop removal -- is apparently a PNC customer. And anything PNC does to call attention to its own virtue would risk making Massey, for one, look worse. 

By the way, as I read this policy, I don't see anything that prevents PNC from continuing to offer financing to Massey. As near as I can tell from corporate filings, the vast majority of Massey's coal comes from non-MTR facilities. PNC can continue to work with Massey on those projects without violating its policy, because MTR is not the company's "primary extraction method."

In fact, what makes PNC's move most surprising is that, once the G-20 left Pittsburgh in 2009, there seemed to have been very little public pressure put on the bank to make this change. As I've noted previously, local media coverage of PNC's connections to mountaintop removal has been conspicuously absent. And there has been little in the way of protests here, despite the fact that PNC's headquarters are Downtown. 

That said, the quiet probably wasn't going to last. No one in Pittsburgh was paying attention, but on Sept. 27, environmental activists staged a sit-in at PNC's flagship location in Washington, D.C. And there was talk among local environmentalists about closing out PNC Bank accounts and depositing them elsewhere -- a symbolic move, to be sure, but one that would have put the bank on notice. 

Based on a recent conversation I had with Randy Francisco, who heads the local chapter of the Sierra Club, PNC would have been right to hear footsteps. Originally, Francisco noted, PNC was a far smaller player in MTR financing than institutions like Bank of America or JP Morgan. But one after the other, those banks caved in the face of public protest ... until PNC was the biggest bank still in the game. 

"Each time, [environmentalists] target the biggest bank -- and when it drops off, the target has been the next bank in line," he says. 

PNC has avoided that fate. And it has done so with a most becoming modesty. Then again, as one environmental activist has noted, " As with all bank policies, we’ll understand what PNC's policy really means in practice as we monitor their financial dealings with the coal industry over the coming months."

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