Merrill Lynch talks a good game when it comes to saving the earth. "We are committed to a policy of environmental excellence," the Wall Street securities firm says on its Web site. This raises a couple of questions. Why, then, is Merrill a lead underwriter for a $10-billion plan to build 11 new coal-fired power plants in Texas that is strenuously opposed by just about every major environmental group in the United States? And what do the environmental policies of the Wall Street investment banks mean - if, that is, they mean anything at all?
These questions arise because of a big battle over global warming that is unfolding in Texas. TXU (Charts), a Dallas-based energy company, wants to build the 11 coal-fired plants, which would emit about 78 million tons of carbon dioxide into the air. That's a lot - more than the greenhouse gas emissions of 21 U.S. states.
As part of their efforts to stop the plants, environmentalists, along with a coalition of institutional investors, have turned their attention to Merrill Lynch (Charts), Citigroup (Charts) and Morgan Stanley (Charts), the three lead arrangers of TXU's financing.
How green is Wall Street? [Fortune]