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In a world of climate commitments and ESG mandates, you’d expect global banks to divest from coal. Yet the numbers tell a different story:
💰 Over $400 billion was poured into fossil fuel projects globally just in the first half of 2025, with Indian and global banks still backing coal.
Why this contradiction? What does it mean for your portfolio, the planet, and the energy economy?
Vizzve breaks it down.
🏦 Why Are Banks Still Funding Coal in 2025?
1. Energy Security Trumps ESG in Many Nations
With global energy demand rising and geopolitical tensions disrupting oil/gas flows, coal is still a reliable fallback.
🌍 India, China, and Indonesia are still heavily reliant on coal for base-load power.
2. Green Energy ROI Isn’t Immediate
Renewables require long-term capital with slower returns. Coal projects still offer predictable, short-term profits to lenders.
3. Coal Financing Is Being Rebranded
Banks are shifting coal-related finance under “transition” labels, such as:
“Clean coal” tech
“Low-emission thermal plants”
4. ESG Ratings Still Lack Standardization
Banks can support fossil fuels while maintaining decent ESG scores because of rating loopholes or regional leniencies.
📊 India Spotlight: Domestic Banks & Coal
SBI, PNB, and Union Bank have financed major coal infrastructure projects in eastern India.
Renewable finance is growing—but coal’s share of total energy lending still exceeds 35%.
💡 Vizzve Insight: What This Means for Investors
✅ If You’re an Ethical Investor:
Use Vizzve’s ESG Fund Analyzer to check if your portfolio supports fossil fuel-linked companies.
Consider investing in “pure-play renewables” (solar, EV infra, battery tech).
🏦 If You’re a Traditional Investor:
Understand the risk of stranded assets in fossil fuels.
Keep an eye on carbon taxes, emission penalties, and global trade sanctions on dirty energy.
🌱 What's the Global Pushback?
IMF & World Bank are nudging banks to quantify financed emissions.
EU Taxonomy no longer considers gas and coal projects green.
Shareholder activism and green bond litigation are rising.
❓ FAQs – Coal Finance in 2025 | Vizzve Answers
Q1. Are Indian banks legally allowed to fund coal?
Yes, unless the project violates environmental clearance. There’s no regulatory restriction in India — only ESG pressure.
Q2. Do ESG funds still include fossil fuel companies?
Some do, especially under “transition” categories. Always check fund disclosures or use Vizzve’s ESG screen.
Q3. Will investing in coal stocks still make money?
Short term, yes — especially in energy crises. Long term, risks from global divestment pressure and policy shifts are rising.
Q4. What’s the alternative for ethical investors?
Consider Green Bonds, ESG ETFs, and CleanTech-focused mutual funds vetted by impact data.
🛡️ Vizzve’s Final Word
The world is going green — but coal isn’t gone. Banks are walking a double line, balancing profits with sustainability claims.
Whether you're an investor, a policymaker, or a conscious consumer — know where your money flows. Vizzve helps you:
Analyze ESG compliance
Filter out fossil-linked stocks
Track green vs. dirty capital flow
📲 Finance with eyes wide open — only with Vizzve.
Published on : 10th July
Published by : SMITA
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