Barclays to reduce funding for oil and gas projects

London — Barclays says it is tightening lending criteria for coal power and will stop financing oil sands exploration and production, but did not announce new restrictions on oil and gas lending as some rivals have.

The British lender on Wednesday extended a previously announced plan to phase out financing for clients involved in coal-fired power generation by 2030 from the UK and EU, to include other countries in the Organisation for Economic Co-operation and Development.

Banks globally have been detailing their plans to cut emissions and keep a lid on the rise in global temperatures, but environmental campaigners accuse them of moving too slowly and have called on them to stop financing new oil and gas drilling.

Announcing results for 2022, Barclays said it will stop financing all oil tar sands companies, as well as new oil sands pipelines, whereas previously it had said it would work with those firms undertaking efforts to reduce their emissions.

However, some environmental activists had hoped the bank would announce a new policy on financing for oil and gas, after HSBC said in December it would stop direct funding of new oil and gas fields.

Barclays also set its first emission-cutting target for the automotive manufacturing industry, with a pledge to reduce emissions intensity by between 40% and 64% by 2030 against a 2022 baseline.

For the residential real estate sector, Barclays set a “convergence point” of reducing emissions by 40% by 2030, which it said was not a target because decarbonising UK homes was dependent on wider changes beyond its control.

The bank said it was on track to meet its 2030 targets with reductions in financed emissions for industries including energy, power and steel.

The absolute emissions generated by its energy clients have dropped 32% since 2020, putting it on track for a 40% reduction by 2030, but the bank acknowledged this was helped by cash-rich energy customers needing less finance in 2022.

Reuters