The Bank of England has announced it will stop accepting bonds linked to thermal coal as collateral for the loans it routinely provides to commercial banks, in a move climate campaigners have hailed as a significant victory. The ban, which takes effect in October, signals that the central bank now views coal-linked assets as too financially risky to hold, given the likely impact of the global shift towards net zero on their value, and campaigners hope it will push commercial banks to reassess their own exposure to the fossil fuel.

The policy, quietly published on the Bank's website in early June, means commercial lenders such as Barclays, Lloyds, NatWest and HSBC will no longer be able to use thermal coal-linked bonds as collateral when borrowing from the central bank. It goes further than similar restrictions adopted by most Western peers, including the European Central Bank, though the Bank has said little publicly about it, and campaigners such as Positive Money's Ellie McLaughlin note the approach comes despite a US-led backlash against green finance policies since Donald Trump's return to the White House. Around 150 major financial firms already restrict dealings with thermal coal, according to Reclaim Finance, but campaigners say the Bank's policy should ideally be extended to cover other "always harmful" activities, such as fossil fuel expansion and deforestation.