Barclays will face a second consecutive year of shareholder pressure on its position as Europe’s largest fossil fuel financier, after a shareholder resolution has been filed for the bank’s AGM on 5 May, calling for financing and exposure to coal, oil and gas to fall in line with the Paris Agreement’s climate goals.
The resolution, coordinated by environmental organisation Market Forces, notes that despite several alterations to policy related to climate change made after last year’s Annual General Meeting, Barclays still hasn’t demonstrated that its provision of financial services – particularly in regard to the coal, oil and gas sectors – is aligned with the Paris Agreement. Following a similar resolution targeting HSBC, scrutiny on UK financial institutions is increasing ahead of the United Nations COP26 Climate Summit in Glasgow later this year.
Barclays remains Europe’s biggest financier of fossil fuels and the seventh largest in the world, financing US $118.11 billion to the coal, oil and gas sectors in the four years since the Paris Agreement. Between January and September 2020, Barclays financed another US $24.58 billion to fossil fuels, an increase on the equivalent time period the previous year. A report released yesterday found Barclays to be the fifth largest lender in the world to the coal industry over the past two years.
“If you want to see how effective Barclays’ climate policies are, you only need to look at its financing. After all the noise the bank has made over the last year, Barclays remains the biggest fossil fuel financier in Europe and the fifth biggest coal lender in the world. That’s not how a Paris-aligned bank behaves.
Barclays heard loud and clear last year from shareholders that it needed a better climate plan. But instead of aligning with the Paris agreement, the bank made some flimsy policy tweaks buffed up by slick public relations.
In reality, Barclays still represents a clear and present climate risk and is overheating investors’ portfolios through its massive financing of global emissions.
Investors are increasingly astute at seeing through the greenwash and we expect them to take responsibility for supporting Barclays to genuinely curb its exposure to all fossil fuels.”
Adam McGibbon, Campaigner with Market Forces
In particular, Barclays plans to remain a significant funder of the coal industry until at least 2030, expanding the scale of the industry, while climate scientists warn that global energy from coal needs to drop by 80% from 2010 levels by 2030. Compared to competitors such as Natwest, ING, Crédit Mutuel and Natixis, Barclays’ plans to reduce coal exposure are far slower. Unlike competitors such as Natwest, Barclays has not set targets to reduce oil and gas exposure over time.
The resolution’s supporting statement also notes how, without further targets and restrictions on fossil fuel investment, Barclays will “continue to expose itself and its shareholders to unnecessary and unacceptable financial, reputational, policy and legal risks, identified by the G20 Financial Stability Board’s Task Force on Climate-related Financial Disclosures.”
The resolution comes amidst a sea change amongst investor expectations on climate change. ISS, the world’s largest shareholder advisory firm, recently announced a policy to vote against company board members if they fail to address climate change in their roles. Pressure from regulators, customers and large investors means that expectations are evolving quickly.
If passed, the resolution will require the company to set further and improved short-, medium-, and long-term targets, to phase out its provision of financial services to fossil fuels, in timelines consistent with the Paris Agreement.
“Barclays’s distant climate “ambition” remains hollow so long as it continues to finance fossil fuel expansion today.
Investors must support this resolution at the AGM to end what now amounts to predatory delay – ‘the deliberate slowing of needed change to prolong a profitable but unsustainable status quo that will be paid by other people eventually’, in the words of Alex Steffen.”
Dominic Burke, Investment Director at the Lankelly Chase Foundation
Notes for editors:
- Market Forces campaigns for financial institutions that have custody of our money to protect not damage our environment. www.marketforces.org.uk
- The resolution text is available here, and the resolution supporting statement is here.
- The influential Banking on Climate Change report, the most comprehensive overview of bank financing of fossil fuels, shows that in the four years following the signing of the Paris Agreement, Barclays financed US $118.11 billion to the coal, oil and gas sectors, making it Europe’s largest fossil fuel financier and the world’s seventh largest. Between January and September 2020, Barclays financed another US $24.58 billion to fossil fuels, an increase on the equivalent time period the previous year.
- According to research from Climate Analytics, for a global coal phase out consistent with Paris, global coal-fired electricity use must fall by 80% from 2010 levels by 2030.