Major investors demand change at Barclays

A group of investors has filed a landmark shareholder resolution with banking giant Barclays over its financing of fossil fuel intensive companies.

Eleven major institutional investors, including Brunel Pension Partnership and LGPS Central, together with more than 100 shareholders, have urged Barclays to phase out its financing of fossil fuel companies that are known to drive the climate crisis.

The resolution is the first climate change resolution to be filed at a European bank. It will be voted on by investors at Barclays’ annual general meeting in May 2020.

Laura Chappell, chief executive officer of Brunel Pension Partnership, which manages some £30 billion of assets, said the lending practices of many banks poses a serious threat to the goals to the Paris Agreement.

“We believe that it is crucial for investors to carry out climate change risk assessments across the whole financial chain,” Chappell said.

“As banks are the biggest lenders, they are a key component of this. We hope the Barclays board formally supports this resolution.”

The shareholder resolution requests that Barclays publish a plan to gradually stop the provision of financial services, including project finance, corporate finance, and underwriting, to companies in the energy sector. It specifically outlines companies in the gas and electric utility industries which are not aligned with the goals of the Paris Climate Agreement.

Since the Agreement was signed in 2015, Barclays has provided more than $85bn of finance to fossil fuel companies and high-carbon projects such as tar sands and Arctic oil and gas.

This makes it the world’s sixth largest backer of fossil fuels, and constitutes the highest level of fossil fuel financing of any European bank, exceeding its peers by over US$27bn, according to the investor group.

In May 2019, a group of Barclays’ investors backed a letter from charity ShareAction to the bank asking it to stop funding companies involved in coal mining or oil sands exploitation. The proposal also encourages Barclays to consider the social dimension of the transition to a resilient and low-carbon economy, as per the Paris Agreement, making it the first climate change resolution to include a so-called ‘just transition’ ask in its supporting statement.

Investors representing more than US $5 trillion have already expressed support for the transition, with this resolution expected to be the first in a series of actions in 2020 that puts financial services to the test on climate change in the run up to the UK-hosted COP26 climate talks.

Jeanne Martin, campaign manager at ShareAction, explained: “The message is clear: piecemeal changes in energy policy will no longer cut it.

“For too long, minor policy improvements have provided cover for the banking sector, while failing to halt fossil fuel financing. We know what needs to happen. Banks must align their lending with the science. If Barclays supports the Paris Agreement, it will support this resolution.”

Last Updated: 10 January 2020
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