Lender also strikes deal to buy Tesco Bank for £600m
Barclays is to stop directly financing new oil and gas projects after bowing to pressure from net zero activists.
The lender – which also separately announced a £600m takeover of rival Tesco Bank – has pledged to crack down on clients who pursue any new oil and gas-only strategies without also developing green alternatives. It will stop offering project finance or other direct finance to oil and gas expansion.
The move forms a key plank of the bank’s revised climate change strategy, in which Barclays will set climate tests for its energy clients such as committing to 2030 methane reduction targets.
Barclays, which has been repeatedly targeted by protesters claiming it is failing to tackle climate change, is seeking to supply $1 trillion (£793bn) of green financing to projects by 2030.
The bank will also pile greater scrutiny on companies solely focused on oil and gas. Diversified companies investing in low-carbon schemes will be supported more by the bank.
Barclays head of sustainable finance Daniel Hanna said: “Capital is critical to the energy transition, to decarbonise hard-to-abate sectors for the world to reach net zero emissions and create a resilient economy.”
Head of sustainability Laura Barlow added that addressing climate change was a “critical and complex challenge”.
“We continue to work with our energy clients as they decarbonise and support their efforts to transition in a manner that is just, orderly and addresses energy security,” she added.
Barclays is a relatively small global player on energy project finance and sits outside the world’s top 15 lenders, meaning it is unlikely to have a major impact on new oil and gas projects.
Responsible investment charity ShareAction welcomed the move but said the bank could have gone further.
Campaign manager Kelly Shields said the bank should demand clients stop oil and gas exploration, which she said adds to climate change.
“Barclays is wrong not to have ruled out financing companies that focus exclusively on fossil fuel extraction. This should include fracking, which is causing so much environmental and social harm and is an activity the bank is heavily exposed to,” she said.
Meanwhile, Barclays struck a deal on Friday to buy the bulk of Tesco Bank for at least £600m in a bid to beef up its consumer lending business.
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