UK-based bank Barclays has pulled out of a $630 million municipal bond deal for private prison and detention center company CoreCivic Inc. and the State of Alabama, following a campaign by several sustainability-focused organizations and investors urging the bank to exit the deal.

Barclays was the lead manager on the deal. Co-managers included KeyBank and Stifel. KeyBank has reportedly chosen to exit the financing as well.

In an emailed statement to ESG Today, Barclays said:

“We have advised our client that we are no longer participating in the transaction intended to provide financing for correctional facilities in the State of Alabama. While our objective was to enable the State to improve its facilities, we recognize that this is a complex and important issue. In light of the feedback that we have heard, we will continue to review our policies.”

Barclays had faced significant pressure from investors and sustainability-focused organizations after announcing its involvement with the deal which was set to finance correctional facilities in Alabama. Last week, the American Sustainable Business Council (ASBC) and Social Venture Circle (SVC) announced the termination of the membership and refunding of dues to Barclays based on its involvement in the financing. An open letter signed by dozens of activists, businesses and investors highlighted the financial and reputational risks faced by the banks through their continued participation in the deal, pointing out in particular Barclays prior commitment not to finance private prisons. The letter urged the banks to exit the deal:

“We strongly urge global investors and banks (like Barclays, Stifel and KeyBanc Capital Markets Inc.) that fund them, not to participate in this financing or any similar financing that enables the carceral state and expands the growth of private actors in the detention of citizens and non-citizens, alike. There should be no tolerance for any company or investor that benefits from a business model dependent on the imprisonment and continued captivity of other men and women.”

The decision by Barclays to pull out of the deal was welcomed by several of the letter’s signatories. David Levine, President and  Co-founder of American Sustainable Business Council, said:

“We applaud Barclays’ decision to not underwrite the Alabama private prison bonds.  We invite them and all other financial institutions to sit down with us so we can chart a responsible and beneficial path forward for investing and rebuilding our communities, and our economy. The American Sustainable Business Council and Social Venture Circle and our businesses and investors will continue to speak out on injustice as we work towards solutions. The American Sustainable Business Council and Social Venture Circle refuse to perpetuate mass incarceration, systemic racism, and human rights abuses through the offering and purchase of taxable municipal bonds.”