Responding to investor strain, Barclays presents new, beefed up local weather coverage

After three months of investor discussions, Barclays has introduced its ambition to be a internet zero financial institution by 2050. At its upcoming annual basic assembly, the financial institution recommends its shareholders vote in favour of a particular local weather decision which comprises commitments to align its financing actions with the Paris Settlement.

The announcement follows an earlier decision introduced by a bunch of traders in January of this yr, led by accountable funding charity ShareAction. In response to this, ClientEarth CEO James Thornton wrote to Barclays’ Board reminding board members of their authorized duties to handle local weather change dangers.

Banks are dragging their toes on the local weather disaster

Local weather change is an enormous menace to communities and the setting worldwide, and it additionally destroys wealth. Bodily property and operations are already being hit by excessive climate, and that is set to worsen. Monetary establishments face climate-related dangers that go far past the difficulty of social accountability – left unchecked, these dangers threaten to destabilise the worldwide financial system and destroy trillions in worth.

Banks have a significant function to play within the transition away from fossil fuels. But they’re massively investing in among the most carbon-intensive and polluting industries. Even because the Paris Settlement was signed in December 2015, 33 of the world’s largest banks have invested some $2.7 trillion into fossil gas firms.

Public strain is mounting. Our latest survey reveals that greater than six in ten folks (62%) didn’t know that their financial institution may very well be investing their cash in fossil fuels, and 67% of younger folks assume monetary establishments and banks needs to be legally accountable in the event that they don’t ditch fossil fuels.

After years of opaque practices from banks, the investor neighborhood is now urging banks to align their financing choices with the Paris local weather objectives.

Legal professionals again the primary climate-related shareholder decision at a European financial institution

In January, 11 main traders filed a decision asking Barclays — one of many UK’s high banks — to part out its financing of fossil gas firms that aren’t aligned with the Paris local weather objectives. Spearheaded by charity ShareAction, the decision was filed by traders collectively managing £130bn. It was the primary climate-related shareholder decision at a European financial institution.

In a letter to Barclays’ Board, ClientEarth CEO James Thornton reminded board members of their authorized obligations to handle local weather change dangers.

He additionally argued that any resolution by Barclays to actively proceed supporting companies which are instantly accelerating world temperature rise makes the financial institution complicit within the environmental and financial injury these companies trigger.

Barclays bows to investor strain

Barclays responded by placing ahead its personal local weather decision, by which it pledged to align all of its financing actions with the objectives and timelines of the Paris settlement, beginning with the power and energy sectors, and to publish “clear targets” to trace its progress.

ClientEarth lawyer Daniel Wiseman mentioned: “With this decision, Barclays has taken optimistic motion on local weather. The resolutions now earlier than shareholders current an historic alternative to remodel Barclays from an trade laggard to a world chief on local weather. They present why it’s so important that traders flex their stewardship muscle groups and demand motion.”

However Barclays continues to be lagging behind its European friends on local weather motion. Since 2015, Barclays has invested £100bn into fossil gas firms. That makes it the most important financier of fossil fuels in Europe, rating seventh on this planet. The financial institution additionally elevated its financing for oil, fuel and coal firms simply final yr.

Wiseman added: “The decision proposed by Barclays is an efficient sign of intent – however it is going to be meaningless if not backed up by a robust and credible technique to align all its actions with the Paris Settlement objectives.

“Barclays’ transfer sends a transparent sign to different monetary heavyweights: persevering with to finance actions that exacerbate local weather change is unsustainable and compounds the dangers local weather change presents to enterprise and society at giant. Banks, pension funds and all different monetary providers firms ought to be aware of these dangers, in addition to the authorized dangers which can ensue if they don’t align with rising trade requirements.”

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