Climate campaigners are doing a victory lap after the Bank of England announced it will stop accepting bonds linked to thermal coal as collateral for key loans starting in October. The move is a fresh crackdown on the fossil fuel that powers your electricity and ruins the planet, and it signals that the central bank thinks coal bonds are now too risky to sit on its balance sheet. Because when even a central bank says 'this might lose value as the world shifts to green energy,' you know the party's over.

Ellie McLaughlin, a senior policy and advocacy manager at Positive Money, called it 'a strong signal from a central bank, and to the market as well.' The Bank quietly slipped the policy onto its website in early June, making about as much fanfare as someone apologizing for a typo. But the implications are big: commercial banks like Barclays, Lloyds, NatWest, and HSBC now can't use coal bonds as a guarantee when they borrow from the central bank to keep operations running. If they fail to repay, the Bank keeps the collateral - so it's basically saying, 'We don't want your coal trash.'

About 150 of the world's largest financial firms already restrict dealings with thermal coal, per Reclaim Finance data from last September. But activists hope this policy will force banks to rethink holding coal assets altogether. The Bank of England's policy statement explained that thermal coal companies 'can be exposed to potential financial risks connected to the adjustment of the economy towards net zero,' and it will also discount bonds in other relevant sectors to protect itself. That's stricter than most Western counterparts, including the European Central Bank - but hey, the Bank of England is just that kind of overachiever.

However, the move comes amid a US-led backlash against green policies since Donald Trump returned to the White House, making it 'much more difficult' for financial companies to stay climate-focused, McLaughlin noted. And the policy's effectiveness hinges on design details - like how the Bank calculates 'haircuts' for climate risk and whether it will exclude other harmful activities like fossil fuel expansion and deforestation. As McLaughlin put it: 'It's quite significant, but there are definitely a lot of areas where the Bank could be going further.' So, a win for the climate, but don't pop the champagne just yet.