Coal’s Split Personality Blurs Compliance on Climate Finance

In the parts of the financial world that have spent the decade since the Paris Agreement trying to curb the most-polluting fossil fuel, there are actually two distinct types of coal — with two very different sets of rules.

Thermal coal, burned in power plants to generate electricity, faces restrictions from roughly 150 of the world’s largest financial companies, according to Paris-based nonprofit Reclaim Finance, which monitors the pledges. Metallurgical coal used to create steel faces pushback from just 13 firms.

Restrictions on thermal coal have been heralded by climate hawks as a crucial lever in breaking the long-running link ...