Barclays to Face Climate Resolution for Second Year in a Row

For the second consecutive year, Barclays Plc shareholders will vote on whether the bank should wind down its lending to the fossil-fuel sector.

A group of individual investors, coordinated by Market Forces, an Australian non-governmental organization, filed a resolution calling on the British bank to bring its financing for coal, oil and gas companies in line with the goals of the Paris climate agreement. The group also demands that the bank introduce short-, medium- and long-term targets to phase out financing to the industries and report on its progress.

As Europe’s biggest fossil-fuel banker, Barclays has been criticized for its role in bankrolling some of the largest emitters of greenhouse gases. Banks are major contributors to global warming via their financing and lending activities, providing the world’s leading polluters with funding for extraction and drilling.

“Barclays still represents a clear and present climate risk, and is overheating investors’ portfolios through its massive financing of global emissions,” said Adam McGibbon, an Edinburgh-based campaigner at Market Forces, in an interview. “There’s no sensible Paris-alignment plan that doesn’t involve rapidly phasing out fossil-fuel finance.”

McGibbon said shareholders are calling on Barclays to reduce its lending in line with the time frames that scientists have specified as necessary to limit warming to 1.5 degrees Celsius above pre-industrial levels, the more ambitious goal under the Paris Agreement.

Coal and Oil

Climate scientists have said to have a chance of reaching the target, global energy use from coal must decline by 78% from 2010 levels by 2030, while oil use should fall 37% and gas 25%. As such, Market Forces is calling for a commensurate reduction in financing to those sectors.

Barclays’s current plans make it “a significant funder of the coal industry until at least 2030” and it has not set any targets to reduce oil and gas exposure over time, the NGO said.

Last year, Barclays became Europe’s first bank to face a climate change resolution when a group of investors led by ShareAction, another NGO, requested that it phase out financing to energy firms that don’t align with the Paris Agreement’s climate goals.

The bank responded by announcing its own plan to cut its net greenhouse-gas emissions to zero over the next three decades and said it planned to adjust its lending and capital-markets activities to be compatible with the goals of the Paris accord. It added further details at the end of last year, saying it had joined an industrywide group that measures emissions from lending and underwriting, and developed its own methodology for calculating funded emissions.

A Barclays spokesperson said the bank will continue to discuss its climate ambitions and progress with its investors, while not offering comment on the specifics of Market Forces’ request.

Only 24%

ShareAction’s 2020 resolution received just 24% of the vote as several large investors threw their weight behind Barclays’s net-zero proposal. McGibbon said he expects this year’s resolution to attract broader support, though whether it’s backed by sufficient numbers to be adopted may depend on how the bank responds.

Since the Paris climate agreement was signed in December 2015, Barclays has helped arrange $93.9 billion of bonds and loans for energy companies, excluding solar, wind and other renewable producers, more than any bank in Europe, according to data compiled by Bloomberg.

JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. have been the biggest lenders to corporate emitters, while HSBC Holdings Plc and BNP Paribas SA are among Europe’s largest financiers, Bloomberg data show. Barclays has said the company’s fossil-fuels business is commensurate with the scale of its overall investment-banking franchise and it hasn’t financed clients its peers turned down.

Shareholders will vote on the resolution at Barclays’s annual meeting in May.

©2021 Bloomberg L.P.

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