UK banks remain the largest financiers of the coal industry in Europe, providing billions of dollars in funding for coal-related activities since the 2021 global climate summit in Glasgow, according to a recent report. The study found that UK-based banks extended approximately $8.3 billion (£6.2 billion) in financing to companies along the coal value chain between 2021 and 2025. This figure surpasses coal financing from German banks, which totalled $4.9 billion, and French banks, which provided $3.4 billion over the same period.
The report, compiled by the Germany-based environmental and human rights organization Urgewald, tracked loans and underwriting activities from 744 commercial banks worldwide. It focused on institutions supporting businesses involved in all aspects of the coal sector, including mining, power generation, logistics, and trading.
Barclays and HSBC were identified as the primary UK banks driving this coal financing. Barclays increased its coal-related funding by 34%, from roughly $1.2 billion in 2022 to $1.6 billion in 2025. HSBC’s coal financing more than doubled, rising from about $200 million to $414 million during the same timeframe. These increases were seen despite both banks’ previously stated commitments to climate goals and net zero targets.
Heffa Schücking, director of Urgewald, criticized the trend, stating that Barclays and HSBC should clarify why their coal financing is growing in contrast to the general downward trend observed in other European banks.
Representatives of HSBC responded by emphasizing the bank’s commitment to phasing out financing for thermal coal-fired power plants and thermal coal mining by 2030 in EU and OECD countries and by 2040 in other markets. They highlighted a reported 94% reduction in financed emissions from thermal coal mining between 2020 and 2024, alongside a decrease in coal-related financing exposures from around $1 billion to approximately $0.5 billion during the same period.
Barclays’ spokesperson noted that many of the companies referenced in the report are diversified energy or mining firms and stated that the bank does not provide financing to companies generating more than 30% of their revenues from thermal coal mining or power generation. The spokesperson added that Barclays aims to support an energy transition by financing current energy requirements while also investing in the expansion of clean energy sources.
The findings underscore the ongoing challenges and complexities banks face in aligning financial activities with climate commitments, particularly in sectors like coal that remain significant contributors to global greenhouse gas emissions.