Some of Europe’s biggest banks have signalled their intention to stop financing dirty coal fired power plants.

HSBC, Standard Chartered, BNP Paribas, Credit Agricole and F&C Asset Management are drawing up a code which would see a significant drop in funding for fossil fuelled schemes.

HSBC and BNP Paribas already have a policy that states they will not lend to plants that produce emissions above a certain level, and yesterday HSBC’s group environment advisor Francis Sullivan was quoted as saying that the new code was the next step in this process.

“I think this is extremely significant in terms of sending a message that commercial banks are able to write policies relating to the financing of coal-fired power plants that take climate change into consideration,” he told the Financial Times.

He added the new code would mean some coal projects “would not make it past the early stages of a lending application”.