Despite continued campaigning from non-profits, activists and investors, Barclays’ shareholders have rejected a proposal that would require the bank to reduce fossil fuel finance on climate grounds.
The resolution was filed in February and, if passed, would require Barclays to align its energy financing with the Paris Agreement’s trajectories using a divestment-based approach.
Barclays has notably been dubbed Europe’s largest fossil fuel banker in terms of investment by some groups, including Market Forces. Bloomberg has estimated that, since the Paris Agreement was ratified in 2015, the bank has arranged $95.7bn of bonds and loans for oil, gas, coal and nuclear power.
In a statement published late on Wednesday (5 May) after a shareholder meeting, Barclays confirmed that just 14% of its shareholders had supported the resolution. This was an even lower proportion than for Braclays’ first climate-related resolution, filed last year. 24% of shareholders backed that initial resolution.
Barclays chairman Nigel Higgins said the bank “totally agrees that [tackling climate change] has to be about action and not just words” but inferred that shareholders likely prefer an engagement-focussed approach to divestment. Higgins added that more than half of the bank’s clients in the energy sector have net-zero pledges already.
He told the meeting: “We agree with the nature of the climate challenge, and we agree — and I hope we’ve made this very clear over the last year or so to shareholders — that we see a continuous need to raise the bar, and improve policies as time goes on.”
Barclays is a founding member of the Bankers for Net-Zero commitment, but the scheme has not yet released its white paper detailing initial policy recommendations and member targets. Its overarching net-zero financed emissions target is 2050, in line with the UK’s national target.
Climate activists and investors have said that the bank has, historically, not moved fast enough on climate issues, calling for more detail on how it will reach its future ambitions without greenwashing.
Higgins said that the bank will develop interim climate targets to support the 2050 net-zero goal in the coming months, before putting them to shareholders at next year’s AGM.
Market Forces campaign lead Adam McGibbon, who helped develop this year’s resolution, said: “Having seen Barclays’ climate policies fail to rein in its investments in fossil fuels in the last year, to have investor support for climate change action drop this year compared to 2020 smacks of either indifference or incompetence from many major investors.
“[However,] there is a healthy group of investors who see past Barclays’ greenwash, who will need to work hard over the next year to convince their colleagues to demand stronger climate action from the bank.”
HSBC is also set to put a climate-related resolution to a vote at its upcoming AGM. If passed, the resolution will require the bank to end financing for coal-fired power and thermal coal mines globally by 2040.
Aside from facing increasing climate pressure from their own investors – the HSBC resolution is backed by a coalition representing more than $2.4trn of AUM – banks are also facing calls to action from their own customers.
A recent Market Forces survey of ore than 2,000 bank customers in the UK has found that more than one in ten would switch banks if they thought their choice of company was investing heavily in fossil fuels. The impact could be significant for big high-street brands, that could lose millions of customers each.
Customers are becoming increasingly aware of the climate impacts of banks’ financing activities. The reports by campaign groups are now making national headlines, for example, and the Make My Money Matter campaign, set up last year by Comic Relief co-founder Richard Curtis, is mobilising UK residents to demand greater climate action from their pension funds and other financial services providers.
Organisations to have changed their climate commitments as a result of Make My Money Matter’s work include Smart Pension and Brunel Pensions Partnership. There have also been movements from firms in other nations, including the US.