Can Banks Save Mountains?

We study bank policies to limit lending to companies engaged in mountaintop removal (MTR) coal mining, a form of coal extraction that has raised many environmental concerns. Using the staggered introduction of these policies, we document that these policies did not lead to meaningful changes in average bank lending or MTR mining. However, larger banks, banks that are under media pressure, and banks operating in the affected states are more likely to reduce MTR loans. Our results are consistent with the hypothesis that banks announced these policies under pressure and to improve their green credentials. (JEL G21, G28, G32) Received March 20, 2022; editorial decision May 2, 2023 by Editor Isil Erel. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.