Barclays Bank has announced it would reduce its carbon footprint to net zero by 2050 as it conceded to investor pressure over its climate track record.
The London headquartered bank had promised to align all of its financing activities with the goals and timelines of the Paris agreement. It will start with rethinking of its investments in the energy and power sectors. The bank has also promised to publish “transparent targets” so that stakeholders are able to track its progress in its environmental efforts.
Reports said that this proposal of the bank will be voted by investors at its annual general meeting on 7 May. This proposal is a result of the measure of the company responding to a separate shareholder resolution that called on the bank to phase out all lending and services to companies in the energy and fossil fuel sector that do not adhere to the Paris climate goals.
The net zero commitment was a “milestone announcement” for the bank, said the campaign group ShareAction – which spearheaded the shareholder vote. However call to shareholders are being made by ShareAction to support both the resolutions so that the bank is actually forced to stop lending out to and investing in companies that are the largest carbon emitters and prevent the bank from simply offsetting those lending and investments by making alternative investments or services to other greener sectors.
According to a recent report by the Rainforest Action Network, in the last four years, Barclays has been the lender in Europe that has invested in companies in engaged in fossil fuels business. The report said that since the Paris agreement was signed in 2016, financial services to carbon-intensive companies and projects extended out by the bank amounted to more than $118bn. The bank was also the largest lender for the Arctic oil and gas project last year.
“The message is powerful: continuing to finance activities that undermine planet stability is not in anyone’s interests – and certainly not shareholders. This is groundbreaking and the board deserves to be commended. Other banks should follow suit,” said Natasha Landell-Mills, the head of stewardship at the asset manager Sarasin & Partners, a co-filer of ShareAction’s resolution.
“What matters now is that the board sets robust nearer-term targets that leave no doubt about its determination to deliver net zero emissions by 2050. Shareholders should underline their support for this by supporting not just Barclays’ resolution but also the shareholder-initiated resolution at Barclays’ forthcoming AGM,” she added.
Before releasing detailed targets by the end of the year, it is expected that Barclays will consult with groups including ShareAction. It is also expected that the first set of reports on the progress made on the issue will be released by the bank in 2021.
In recent months, a number of high-profile investors publicly backed the ShareAction vote which had put the lender under mounting pressure.
(Adapted from TheGuardian.com)