UK bank Barclays announced a new policy significantly limiting its financing activities for some emissions intensive energy sectors, including ending financing for oil sands companies and projects, and accelerating its phase out of financing for coal-powered generation for clients in OECD economies.
Sustainability-focused groups, however, said that Barclay’s new commitments did not go far enough to address the emissions impact of its financing activities.
Released as part of the bank’s 2022 ESG investor presentation, the new policy forms part Barclay’s initiatives to reduce its financed emissions. The bank has previously committed to align its financing with the timelines and goals of the Paris Agreement, consistent with limiting the increase in global temperatures to 1.5°C.
Under the updated policy, Barclays said that as of July 2023, it will not provide financing to companies generating more than 10% of revenues from oil sands exploration, production or processing assets, or from the construction of new oil sands exploration, production or processing assets. The bank will also not provide financing for the construction of pipelines whose primary use is for the transportation of crude oil extracted from oil sands.
On the coal front, Barclays had previously committed to phase out financing for clients engaged in coal-fired power generation in the EU and UK by 2030, and by 2035 for the rest of the world. Under the new policy, all OECD clients, including the US will now be included in the 2030 target.
While welcoming the bank’s new policy, sustainability-focused groups expressed disappointment that the bank failed to announce a more aggressive fossil fuel financing policy, and noted that Barclays’ commitments lack those of some of its European peers.
Responsible investing NGO ShareAction recently coordinated a campaign by a group of investors representing more than $1.5 trillion in AUM, calling on several banks, including Barclays, to set commitments to end financing for new oil and gas fields, noting that similar pledges from banks including HSBC, BBVA, ING, Lloyds Banking Group, and UniCredit, have set a new “minimum level of ambition” for banks committed to net-zero.
In a statement following the release of Barclays updated policy, Jeanne Martin, Head of Banking Programme at ShareAction, said that the bank “continues to be out of step with current minimum standards of ambition within the industry.”
“Barclays should step up and act swiftly to update its oil and gas policy ahead of its 2023 AGM to meet science-based standards on climate that have made it clear there is no room for new oil and gas fields if we want to limit global warming to 1.5C.
“Otherwise, the bank should be prepared to deal with further shareholder action to encourage Barclays to meaningfully align with its net zero goal.”