EBKDY Ersta Group Bank AG (PK)

By Maitane Sardon

Erste Group Bank AG on Wednesday pledged to phase out coal by 2030 in an effort to align its financed activities with the Paris Agreement on climate change.

The Austrian bank, which has 0.3% of its portfolio exposed to coal, said it will progressively reduce its financing for the thermal-coal mining and power-generation sectors with the aim of having no exposure to the highly polluting fossil fuel by 2030.

"The coronavirus pandemic is an obvious chance for an ecological reboot for the whole economy," said Chief Executive Bernd Spalt. "I believe that future growth must come from sustainable projects."

Under Erste's new policy, new direct financing of coal-asset-specific investments or cash flows related to coal mining, coal processing, coke processing or coal-based power generation are no longer eligible, it said.

Additionally, Erste won't provide financing for companies that extend their coal mining or coal-based power-generation capacities, or that derive more than 25% of revenues from the coal sector. It will also stop financing the trade of coal as a commodity and its stocking and processing, it said.

The bank said it will engage with its clients to help them set plans to transition to greener fuels within the 2030 timeframe.

Write to Maitane Sardon at maitane.sardon@wsj.com

(END) Dow Jones Newswires

March 10, 2021 05:03 ET (10:03 GMT)

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