UK-based Lloyds Banking Group has decided to stop financing new coal-fired power stations or thermal coal mines.

The decision is part of the bank’s commitment to support lower-carbon future and complements a £2bn Clean Growth Finance initiative, which was launched earlier this year.

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Lloyd’s new initiative aims to offer discounted lending to help businesses invest in reducing their environmental impact.

Under this initiative, the bank will help businesses reduce carbon and greenhouse gas emissions, increase energy and water efficiency, reduce waste and make other improvements to their environmental sustainability.

"To achieve the aims set out in the 2015 Paris Agreement, continued reduction in the amount of coal mined and used to generate electricity is needed."

Lloyds Banking Group commercial banking director David Oldfield said: “We are already committed to supporting businesses that are leading the way by investing in renewable energy and a cleaner future, including those that are diversifying their business models away from fossil fuels.

“To achieve the aims set out in the 2015 Paris Agreement, continued reduction in the amount of coal mined and used to generate electricity is needed. This announcement reiterates our commitment to support the transition.”

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The bank’s new Helping Britain Prosper Plan also includes a commitment to power five million homes by 2020 by supporting renewable energy projects in the UK.

Additionally, the financial institution has collaborated with the University of Cambridge Institute for Sustainability Leadership to offer specialist training to more than 300 relationship managers in order to support clients’ transition to a more sustainable economy.

Lloyds Banking Group noted that it will continue to work with its clients engaged in coal mining or power generated from coal and support their transition to lower carbon models in line with the Paris Agreement.

In 2016, the bank launched a £1bn green funding fund for the commercial real estate, aimed at helping clients to reduce the carbon emissions by improving the energy efficiency of 10 million square feet of real estate by 2020.