Picture: REUTERS
Picture: REUTERS

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

A group of individual investors, co-ordinated by Australian nongovernmental organisation Market Forces, have 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 criticised 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°C above pre-industrial levels, the more ambitious goal under the Paris Agreement.

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.

Another resolution

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 NGO ShareAction 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 2020, 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.

Since the Paris climate agreement was signed in December 2015, Barclays has helped arrange $93.9bn 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, Wells Fargo and Citigroup have been the biggest lenders to corporate emitters, while HSBC  and BNP Paribas 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.

Bloomberg

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