Who owns the Coal? - InfluenceMap · 2 3 WHO OWNS THE COAL OCTOBER 2016 1 The Carbon Ownership...
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Who owns the Coal? A detailed analysis of who has effective control of the world’s listed coal companies January 2017
Transcript of Who owns the Coal? - InfluenceMap · 2 3 WHO OWNS THE COAL OCTOBER 2016 1 The Carbon Ownership...
Who owns the Coal? A detailed analysis of who has effective control of the world’s listed coal companiesJanuary 2017
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Who Owns the Coal? A detailed analysis of who has effective
control of the world's listed coal companies
Contents
Summary ............................................................................................................................................... 2
The Carbon Ownership Chain ............................................................................................................... 3
InfluenceMap's Finance Project ............................................................................................................. 4
Coal Ownership Trends ......................................................................................................................... 5
Focus on the Listed Funds .................................................................................................................... 6
Asset Owners: Who's Divested .............................................................................................................. 8
The Japanese Connection ..................................................................................................................... 9
Appendix A - Which Funds Own the Coal ........................................................................................... 10
Appendix B - The Coal Top 100 .......................................................................................................... 11
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Summary
n A recent
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The Carbon Ownership Chain The effective or beneficial owners of all of society's financial assets must be individuals, as opposed
to legal entities who may be the registered owners. On this basis an ownership/investment chain can
be constructed tracing various types of individuals on one side of the chain with the physical assets,
like coal reserves and associated infrastructure on the other. In the middle lie a variety of operating
companies, financial intermediaries and public sector institutions. The following info-graphic shows
the range of actors in the chain. The nature of the chain will vary with geography and changes with
time. For example in China, the majority of Registered Owners of coal assets are government entities.
In the US currently, a large chunk of the coal sector is registered in the name of Private Equity and
High Net Worth Individuals. This general analysis is universally applicable and is a useful starting
point in understanding how the investment and finance system can alter the manner in which the
carbon assets are managed.
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InfluenceMap's Finance Project In theory, the beneficial owners in the chain above should be able to exert their rights and interests
through the chain to ensure their values and interests are reflected. A major underpinning of the
theory of change of sustainable finance as it applies to climate change hinges on the beneficial
owners like pension and insurance beneficiaries and individual savers having their collective voice
heard when it comes to management of the carbon assets by the operating companies like Shell and
BHP Billiton. There are two major barriers.
n The two sides of the chain above contain numerous intermediaries and the positions of the
beneficiaries are dispersed and not efficiently communicated through the chain.
n Information on who owns precisely what in the chain is not well disclosed and what is disclosed
is not aggregated in a publicly available manner allowing the beneficial owners to communicate
their values.
InfluenceMap's Finance Project aims to shed light on the second of these two barriers by forensically
tracking and aggregating the data that is available in the entire chain, globally from legal disclosures
and making this available to the investment and campaign communities and the general public.
Some very important information issues should be noted.
n The ability to track registered owners of coal and other stocks is limited by disclosure
requirements. In general asset owners (as opposed to asset managers or listed funds) are not
required to disclose their holdings.1
n Asset managers (who charge fees to manage external money) are required to declare their
holdings on a quarterly basis, as are listed funds in most countries.2
n Tracing ownership to asset owners is difficult as they often award mandates to manage their
assets to investment managers (like Blackrock, in whose name the shares are registered) or buy
listed funds rather than individual stocks.
n A concern of the climate community is that monies divested from coal production equities may
be reinvested elsewhere in the coal value chain, such as utilities or transport. Our data will
expand to these sectors analysing the coal exposure in each company and ownership trends as
relevant.
With these caveats in mind, we initiate our project on the coal production sector. Our full interactive
table can be found online whereby users may filter for region, value metric and size of investor.
1 The SEC requires insiders and individuals with 5% or more of a company to declare holdings (13-D, 13-G, 14-A). 2 The SEC, for example, requires asset managers with over $100m AUM to declare, via the 13-F process.
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Coal Ownership Trends Divest/Invest has been a major theme of the climate movement in the past decade with numerous
asset owners pledging to divest from the coal and other fossil fuel sectors in various ways and
according to a range of time scales. A key objective of InfluenceMap's Finance Project is to create
objective metrics to measure these divest pledges, with an initial focus on coal.
We examine 100 of the largest listed coal companies responsible for over 50% of the production of
thermal coal globally (6.62 billion tonnes)3. To put this in perspective the production from these 100
companies represents roughly 20% of annual global CO2 equivalent GHG emissions from man's
activities when it is combusted for energy generation.4
In this report, we merge two data sets using smoothing and querying algorithms to ensure
consistency and remove spurious data points.5
n Financial disclosures in 20 legal jurisdictions relating to the holdings of listed funds (ETFs,
mutual funds, investment trusts etc.).
n The annual reports and regulatory submissions of the 100 coal companies providing data on
revenue, coal production, coal reserves and the proportion of sales the companies derive from
thermal coal production.
3 International Energy Agency data, 2016, includes lignite coal production, which is primarily used in electricity generation. 4 International Energy Agency data, 2015, excludes land use emissions. 5 In the process we analysed over 40 million data points over a period 2010-present.
World Thermal Coal Produc0on
100 Listed Companies
Private Russian Companies
Other Chinese companies
State Owned European and Asian Companies
Private and Small US Coal Companies
Other
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Coal ownership may be measured from a variety of viewpoints and we offer users several metrics
with which to filter the most coal intensive funds.
n Value of the coal holdings - in our metrics we temper this by multiplying by the % of revenue
the company gets from thermal coal6 in order to avoid attributing the entire value of diversified
companies to the tally.
n Value of the coal holdings as a percentage of total assets under management - we generally
consider equity-only funds so this is a straightforward ratio.
n Coal production owned - if the fund owns a % of the coal company we in turn attribute this
annual coal production to the fund-owner.
n Coal reserves owned - if the fund owns a % of the coal company we in turn attribute this yet-to-
be-combusted coal to the fund-owner.
The coal-related metrics above are useful as they can easily be converted to greenhouse gas
emissions equivalent if the user is interested in this climate perspective. In addition, given the recent
collapse in the value of coal companies the coal-metrics may be a more indicative one to judge
changes in the coal intensity of an asset owner's holding.
Focus on the Listed Funds In this initial report we examine a key part of the Registered Owners aspect of the chain - Listed
Funds. These funds now control over 50% of the value of stock markets globally and make up the
majority of most individuals' savings, pensions and investments. In this study we assessed 50,000
of the world's largest listed funds and linked them to investment management companies like
Blackrock and the Vanguard Group to detect common ownership patterns.
Listed funds are generally required to disclose their positions (that is, what they own) to financial
regulatory authorities like the Securities and Exchange Commission in the US, each quarter so good
data is available in principle. Listed funds are increasingly becoming the core of investment and
ownership of assets by individuals. Clearly these funds are in turn owned by other parts of the
Ownership Chain and ultimately the individual beneficiaries. Due to the relatively clear disclosure
requirements and wide ownership, this presents a useful start to analyse trends and patterns in
ownership of the global coal assets.
Our data shows that 60% of the value of the 100 top listed coal companies are owned by listed equity
funds. These include a range of funds - passive tracking funds, actively managed, thematic funds etc.
Due to hugely varying coal company valuations (most have declined by 50% or more over this time
6 All data taken from annual reports 2011-2015
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period, its helpful to measure ownership in terms of the coal production that the ownership stakes
represent.
We slice and dice our data to look at trends in how the funds have divested and invested in the coal
stocks over the last five years, by region and type of fund.
Our full interactive table can be found online whereby users may filter for region, value metric and size
of fund.
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Asset Owners: Who's Divested
In the investment chain asset owners like pension funds, insurance companies and wealth funds are
one step away from the actual individual beneficiaries (i.e. savers, policy holders and citizens).
Tracing ownership to asset owners is difficult as they often award mandates to manage their assets to
investment managers (like Blackrock, in whose name the shares are registered) or buy listed funds
rather than individual stocks. With this in mind, we examine some prominent asset owners that have
made divestment pledges over the last few years and assess these claims against our coal equity
ownership database.
Asset Owner Coal
Production
Owned
Coal Reserves
Owned
Coal Production
Change %
Coal Reserves
Change %
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The Japanese Connection Japanese strategic investors like Mitsubishi Corporation, Mitsui & Co and Itochu now own significant
amounts of coal production and reserves. Based on our analysis of minority holdings of public and
privately held coal producers by the Japanese trading and investment giants we can compile the
following information on recent trends in buying and selling of coal reserves by this key part of the
global coal ownership chain. The following data is aggregated from all the holdings in coal ventures
these companies have around the world.
< Note these are initial numbers, which will rise substantially once we aggregate all holdings >
Company Coal
Production
(tonnes)
Coal Reserves
(tonnes)
Coal Production
Change %
Coal Reserves
Change %
Idemtitsu 11,274,000 235,000,000
Itochu 6,490,000 672,150,000
Mitsui & Co 1,952,653 65,080,500
Mitsubishi Corporation
Sumitomo Corporation
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Appendix A - Which Funds Own the Coal By Individual Listed Fund
The following is a list of the top listed fund holders of coal stocks sorted by the % of the fund value.
Full details can be found on our interactive online tool, via which the Top 50 as expressed in a range
of metrics can be generated. All coal data in millions of tonnes.
Fund Fund Value % Coal $Value Coal
Production
Coal
Reserves
Blackrock
Vanguard
By Fund Management Company Here we group the funds managed by the same companies and gauge the most coal intensive fund
managers by % of the fund value. All coal data in millions of tonnes.
Fund Company Total Equity
Fund AUM % Coal $Value
Coal
Production
Coal
Reserves
Blackrock
Vanguard
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Appendix B - The Coal Top 100
Company
Annual Coal Production
(tonnes)
Coal India 494,238,000
China Shenhua Energy 280,900,000
Peabody Energy 209,550,000
Arch Coal 133,796,000
Glencore 122,000,000
Shaanxi Coal Industry 110,016,825
RWE 95,200,000
Anglo American 94,900,000
Bumi Resources 84,200,000
Alpha Natural Resources 83,538,000
Cloud Peak Energy 75,100,000
Yanzhou Coal Mining 64,480,000
Yangquan Coal Industry Group 54,574,598
Westmoreland Coal 53,530,000
Beijing Haohua Energy Resource 52,506,119
Banpu 50,600,000
Adaro Energy 50,350,000
PGE Polska Grupa Energetyczna 49,400,000
Huolinhe Opencut Coal Industry Corp 46,600,000
Itochu Corporation 46,000,000
Public Power Corporation 43,800,000
Vinacomin Coc Sau Coal 42,000,000
Alliance Holdings 41,200,000
Sasol 41,200,000
BHP Billiton 41,012,000
Exxaro Resources 39,953,000
Datang International Power Generation 38,480,000
Datong Coal Industry 34,872,300
Inner Mongolia Yitai Coal 34,340,000
Natural Resource Partners 34,312,120
Shanxi LuAn Environmental Energy Development 32,447,847
South32 31,681,000
Indika Energy 30,900,000
NACCO Industries 30,600,000
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Indo Tambangraya Megah 28,500,000
Tata Power 26,600,000
NLC India 25,451,000
CONSOL Energy 24,742,000
Berau Coal Energy 24,200,000
Pingdingshan Tianan Coal Mining 20,284,763
Foresight Energy 20,100,000
Shanxi Coal International Energy Group 19,530,000
Bukit Asam 19,282,951
Rio Tinto 18,638,000
Jizhong Energy Resources 18,609,900
Energy Australia 18,000,000
Shanxi Xishan Coal and Electricity Power 16,140,000
SDIC Xinji Energy 14,808,538
Anhui Hengyuan Coal Industry and Electricity Power 14,296,400
Mitsui & Co 12,916,750
Whitehaven Coal 11,972,000
Yancoal Australia 11,855,600
Bayan Resources 11,300,000
Idemitsu Kosan 11,274,000
Adani Enterprise 11,000,000
Kuzbasskaya Toplivnaya Company 11,000,000
Gansu Jingyuan Coal Industry and Electricity Power 10,850,000
Henan Dayou Energy 10,483,869
Zhengzhou Coal Industry & Electric Power 10,420,000
LG International 10,000,000
China Coal Energy 9,547,000
Inner Mongolia PingZhuang Energy Resources 9,412,400
Golden Energy Mines 8,700,000
Westmoreland Resource Partners 8,481,000
Lubelski Wegiel Bogdanka SA 8,457,000
African Rainbow Minerals 8,340,000
Semirara Mining Corporation 7,980,000
PTT 7,900,000
Baramulti Suksessarana 7,750,000
Berkshire Hathaway 7,449,000
Hallador Energy 7,447,000
Wesfarmers 6,977,000
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Gujarat Mineral Development Corporation 6,968,000
Toba Bara Sejahtra 6,100,000
Lanna Resources 6,000,000
New Hope Corporation 5,700,000
Capital Power 5,500,000
Mechel 5,200,000
United Tractors 4,600,000
CNX Coal Resources 4,558,000
Southern Kuzbass Coal Company OJSC 4,200,000
Mitrabara Adiperdana 4,143,080
Black Hills Corporation 4,100,000
New World Resources 4,010,000
Agritrade Resources 4,000,000
ALLETE 4,000,000
Kinetic Mines and Energy 3,800,000
CESC 3,500,000
Severstal 3,377,000
Shanxi Lanhua Sci-Tech Venture 3,152,900
Sundiro Holding 2,746,900
Anyuan Coal Industry Group 2,690,100
Jindal Steel And Power 2,263,238
Rhino Resource Partners 2,100,000
Wescoal Holdings 1,920,000
Shanghai U9 Game 1,660,958
Vale 1,560,000
China Qinfa Group 1,442,000
Mongolian Mining Corporation 1,350,000
Blackgold International Holdings 1,052,774
InfluenceMap is a non profit Community Interest Company (CIC) No. 9480976
Contact InformationWe are based at 40 Bermondsey Street, London SE1 3UD, UKEmail: [email protected] Web: http://influencemap.org
About InfluenceMap We are a neutral and independent UK-based non-profit whose remit is to map, analyze and score the extent to which corporations are influencing climate change policy. Our knowledge platform is used by investors, climate engagers and a range of concerned stakeholders globally.
