Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTFelicity BradstockSat, August 1, 2026 at 5:00 PM GMT+2 5 min readEnvironmental groups have been campaigning to encourage banks and other financial institutions to divest from fossil fuels for years, with efforts growing stronger since the Covid-19 pandemic and the global push to transition away from oil, gas, and coal to renewable alternatives.In June, the Bank of England quietly announced that it would no longer be accepting bonds associated with coal operations for key loan arrangements. The ban will be enforced from October. It is the latest move to encourage a shift away from thermal coal for electricity production. The Bank of England said it would no longer be allowing commercial banks to use bonds linked to thermal coal as "collateral" when borrowing money from the financial institution.The move suggests that any bonds linked to thermal coal are now considered too risky to appear on its balance sheet, as consumers and governments worldwide call for a shift away from "the dirtiest fossil fuel". The rapid global transition to renewable energy could lead certain types of fossil fuels to depreciate in value over the coming decades, making them more of a financial risk.The Bank of England stated that thermal coal companies "can be exposed to potential financial risks connected to the adjustment of the economy towards net zero," in its policy statement. It said it would also discount the value of bonds in other relevant sectors "to protect the Bank against financial risks".It is common for the Bank of England to provide loans to major banks operating in the United Kingdom, including Barclays, Lloyds, NatWest, and HSBC, to help them settle transactions and conduct operations efficiently. To gain access to these loans, commercial banks must provide collateral as a guarantee, typically in the form of bonds.A wide range of financial institutions have already introduced certain restrictions on the thermal coal industry. However, the introduction of restrictions by such an important bank may well give commercial banks cause to reconsider their links to the coal industry.The Bank of England's policy is stricter than that of similar financial institutions, such as the European Central Bank. However, little attention has been given to the move since the Bank released the new policy on its website rather than making a formal public announcement. This quiet approach to climate action is down to a variety of reasons, including mounting pressure from the United States government to ditch renewable energy in favour of continued fossil fuel development. Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info