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Several major world economies are seeking to finalise a plan before this year's U.N. climate summit to stop new private sector funding for coal projects, according to five sources familiar with the matter. The draft proposal by the Organisation for Economic Co-operation and Development (OECD) would be the first multilateral initiative to restrict financing for coal, a major contributor to climate change due to its high carbon dioxide emissions. The OECD's draft plan sets a ?gold standard? policy for financial institutions, instructing investors, banks, and insurers to halt new financing for existing or planned coal projects and to end funding for companies building coal infrastructure. Instead of divesting from coal assets, financial institutions would fund the early retirement of coal plants, paired with financing for clean energy to replace the lost capacity. From January 2021 to December 2023, commercial banks' lending and underwriting to the coal industry totalled $470 billion, according to NGO Urgewald. The OECD's 38 member countries, which include most of the world's largest market-focused democracies, are providing feedback on the proposal, which will be open for public consultation before its formal adoption ahead of the U.N. COP29 climate summit in Azerbaijan in November. Although the OECD policy would be non-binding, it aims to establish an international standard for companies' boards and shareholders. Previous OECD guidelines, such as those on child labour, have been adopted by multinational companies, setting standards in countries lacking formal laws. France, the United States, Britain, Canada, and the European Union support the proposal, part of the ?Coal Transition Accelerator? initiative introduced by France at last year's COP28 climate summit. This initiative, which also aimed to reduce the cost of capital for clean energy investments, was supported by coal-reliant emerging economies like Indonesia and Vietnam, both of which have secured multi-billion-dollar deals to reduce coal reliance. Japan, the world's third-largest coal importer, has been the main opponent of the OECD proposal. As OECD decisions require consensus, Japan's stance could influence the final guidelines. Japan's ministry of economy, trade, and industry did not respond to a request for comment. The proposal might be diluted to stop project finance but not general corporate lending, or it could target investments in power plants rather than all coal infrastructures. G7 leaders, including those from France, the U.S., and Japan, will discuss coal phase-out efforts at a summit in Italy next week, potentially impacting the OECD deal's objectives. (Source: ET)