Barclays has pledged to stop directly financing new oil and gas projects and move capital toward supporting companies engaged in decarbonization, it said in a statement Friday.
The move is part of the British bank’s updated climate strategy and follows intense criticism from climate experts and activist investors over its involvement in fossil-fuel programs.
Barclays was previously the largest funder of the oil and gas industry in Europe and is currently Britain’s biggest lender to the sector. Still, critics — including the nonprofits ShareAction and ActionAid — said the moves did not go far enough.
A similar move from Bank of America faced backlash from Republicans
Barclays’ announcement followed similar moves by other lenders like HSBC, BNP Paribas, and Bank of America. The American firm, however, appeared recently to backtrack on its commitment to stop financing new coal mines — a pledge it made two years ago. The bank’s updated environmental policy in December said that the projects will now be subject to “enhanced due diligence” after it was criticized by Republican lawmakers, who labeled its climate pledges “woke capitalism.” In the U.S., conservative states like Texas and West Virginia have passed laws that would limit officials from doing business with organizations that “divest from fossil fuels,” NPR reported, while in New Hampshire, lawmakers recently rejected a bill proposed by Republicans who wanted to criminalize ESG investing, whereby money is allocated in part on environmental, social, and governance standards, on the part of state funds.
A major pension fund cuts ties with oil and gas groups
One of Europe’s largest pension funds, PFZW, said Thursday that it had sold over $3 billion of its holdings in oil and gas groups like Shell and BP, the Financial Times reported — saying that they did not introduce adequate plans for decarbonization. “The intensive shareholder dialogue over the past two years with the oil and gas sector on climate has made it clear to us that most fossil fuel companies are not prepared to adapt their business models,” to meet the Paris climate agreement, the Dutch fund’s chair Joanne Kellermann told the FT. The pension fund’s decision came after the European Union’s climate agency said that average global temperatures were 1.5 degrees Celsius above pre-industrial levels — the threshold targeted by the Paris Agreement to contain climate change — for 12 consecutive months.