Barclays’ climate strategy ‘is not Paris aligned’

Shareholders encouraged to vote against plan at bank’s AGM in May


Christine Dawson

Barclays’ updated climate strategy has been met with disappointment as critics say it is not aligned with the goals of the Paris Agreement and allows the bank to continue financing expansion of oil and gas.

Last year, Barclays said it would give shareholders a say on climate at its 2022 AGM, and followed this up this week with the publishing of a strategy that will be put to a vote in May.

Central to the bank’s plans are setting 2030 goals that “integrate a 1.5°C-aligned scenario” across its investments in energy, power, cement and steel. It is committing to include methane in how it measures greenhouse gas emissions for energy, setting final exit dates for financing thermal coal mining and coal-fired power generation and updating its targets to reduce operational emissions.

Barclays also said executive director remuneration will be aligned with its climate commitments.

Barclays group chairman, Nigel Higgins, said the group was trying to balance addressing climate change with funding the green transition: “We must deliver on our climate strategy and continue to evolve it.

“It is not a simple task to address the climate challenge whilst also giving appropriate support to those companies which we believe are committed to the transition and respecting legitimate concerns about energy security, energy poverty and the just transition.

“We do hope that shareholders support the work that we have done so far, recognising that as always, there is more to be done.”

Lacking ambition

Responsible investment charity, ShareAction, however, encouraged shareholders not to support the strategy, pointing to “troubling loopholes.”

Lydia Marsden, senior research officer at ShareAction, said: “Barclays’ Say on Climate plan lacks the ambition needed to address the climate crisis.

“By failing to update its oil and gas policy it can continue to finance Paris-misaligned activities such as oil sands and new oil and gas.

“Investors need to question whether Barclays’s policies and targets truly mark progress or instead enable business as usual for its clients.

“We call on them to vote against this plan at the bank’s 2022 May AGM.”

Marsden also highlighted the fact Barclays’ 2030 phase out for thermal coal power does not include the US – “ a coal generation powerhouse” – and noted its restrictions to coal expansionists starts in 2023,  two years behind International Energy Agency guidance.

Own goal

Campaign group Market Forces slammed the strategy as “self-defeating” because it allows continued expansion of the fossil fuel industry which makes it impossible for the bank to achieve its own net zero goals.

Research from ShareAction published last month showed Barclays is Europe’s second-largest bank financier for the expansion of upstream oil and gas. It financed $4.9bn from 2016-21.

Adam McGibbon, UK campaign lead at Market Forces, said the plan allows for business as usual for companies expanding the fossil fuel industry, including BP, Chevron, Eni, Equinor, ExxonMobil, Repsol, Shell, and Total.

“Last year, Market Forces research found that from January 2020 to March 2021 alone, Barclays participated in financing syndicates totalling $97.6bn across 22 loan and bond deals for these companies, which are eight of the world’s largest integrated oil and gas companies,” said McGibbon.

He also criticised Barclays for not yet setting an emissions reduction target for the power sector, setting instead an emissions intensity reduction target.

“This makes it unclear whether and to what extent the company’s total emissions exposure in the power sector will decline.”

Barclays declined to comment on reaction from either ShareAction or Market Forces.

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