Barclays risks greenwashing claims as climate policy is ‘not fit for purpose’
Unlike its peers HSBC, Lloyds Banking Group and NatWest, Barclays has not committed to take action against oil and gas expansion
Barclays' latest annual report includes a new oil and gas policy, but unlike its peers HSBC, Lloyds Banking Group and NatWest, Barclays has not committed to take action against oil and gas expansion.
This ignores the main conclusions of scientists and the International Energy Agency that to limit warming to 1.5°C, industries including banking need to stop developing new oil and gas production and transport projects as quickly as possible.
Lucie Pinson, Director of Reclaim Finance in London, explains to Net Zero Investor why she thinks this failure to act against new oil and gas projects means Barclays will be able to carry on providing finance to companies such as ExxonMobil and TotalEnergies, which are among the biggest developers of new oil and gas projects.
She calls on the bank to up its game, or risk being accused of greenwashing.
Barclays' new oil and gas policy includes one new commitment: an exclusion policy on financing for companies that are mainly active in oil sands extraction, and for projects directly linked to oil sands production and transport. This is nowhere near enough to meet its own commitments to achieve carbon neutrality by 2050, following a 1.5°C trajectory.
Lucie Pinson, Director of Reclaim Finance, says: "What a missed opportunity! There are 526 pages and a hundred or so mentions of fossil fuels but not one major new commitment that would bring Barclays closer to meeting the climate imperative of actually limiting global warming, that is to say no more support for new oil and gas projects. Coming from a bank that is committed to net zero, this is what the UN would call greenwashing."
While the IEA says that it is possible to meet the world's energy needs and limit warming to 1.5°C without opening up new projects, and the IPCC says that this is essential to avoid the worst effects of climate change, the United Nations is calling climate promises made by financial actors that do not end their support for fossil fuel expansion “greenwashing”.
In the last six months, HSBC, Lloyds Banking Group and NatWest have all taken steps to reduce their support for oil and gas expansion.
The measures taken are minimal, mainly confined to project finance which accounts for less than 10% of all fossil fuel finance, but at least indicate an understanding of the issues by Barclays' competitors.
Barclays is the European bank providing the most support for fossil fuels and has, according to the report "Throwing Fuel To The Fire: GFANZ financing of fossil fuel expansion", provided more than $8.4 billion to the companies developing the most new oil and gas projects since it joined the Glasgow Financial Alliance For Net Zero in April 2021.
In 2022, it supported companies such as ExxonMobil and TotalEnergies, which are among the seven largest oil and gas developers in the world.
Last month, some 30 investors wrote to five European banks, including the British bank, asking them to commit to cease direct financing of new oil and gas fields by the end of the year.