Banks have spent a lot of time worrying about stranded assets on their balance sheets. This relates to loans to coal-fired power stations or even oil companies whose activities are incompatible with new green and sustainable standards.
But what about stranded communities? These are the coal miners and power industry workers who lose their jobs as a result of the transition. Often the coal mine is the main employer in a remote area and the result of it closing is a ghost town and decaying community. Can banks with their new community focus do anything to help?
For banks operating in eastern Europe, the task has been made easier by the many initiatives already under way to either manage the transition or to revive areas suffering from the destruction brought about by mining.
Banks wishing to be involved can start by reading a booklet called ‘Heroes of Just Transition’ with articles about ‘communities on the frontlines of a post-coal future in central and eastern Europe.’
As Petr Hlobil, campaign director for CEE Bankwatch Network, an organisation that monitors the impact of public finance, pointed out at the EBRD annual meeting in Sarajevo, the impetus for a proactive approach is coming from mayors and other community leaders. For while central governments and the miners themselves may be resistant to change, many community leaders recognise that the days of the coal industry are numbered, so planning the transition and making it just is the only sensible approach.
On the front cover of the Just Transition booklet is the smiling face of Katarína Macháčková, the mayor of Prievidza in Slovakia, who has been driving the planning for a post-coal future while receiving a lot of criticism for her efforts. “Sooner or later the mining activity will gradually terminate. If we prepare for the transformation, we will be able to handle it, “ she says. Further information on this initiative can be found at the just-transition.info website.
Brian Caplen is the editor of The Banker. Follow him on Twitter @BrianCaplen
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