Barclays faces landmark challenge on financing fossil fuels

Barclays has become the first European-listed bank to face a shareholder challenge on climate change, with a call for the bank to phase out the financing of fossil fuel companies and certain utility companies starting next year

Eleven institutional investors, who between them control £130bn and include Brunel Pension Partnership, LGPS Central, and Merseyside Pension Fund, as well as over 100 individual shareholders, have filed a resolution which will be put to a vote at Barclays’ annual meeting in May. 

It asks Barclays to set and disclose targets to gradually stop providing financial services to companies in the energy sector, and to gas and electric utilities that are not aligned with the goals of the 2015 Paris Agreement on climate change.

The bank is also being asked to report annually on progress against the targets, starting from 2021 with information in its strategic report.

ShareAction, which is coordinating the resolution, says since the Paris Agreement was signed, 33 of the world’s largest banks have invested $1.9 trillion (£1.4 trillion) into fossil fuel companies.

The pressure group says Barclays was responsible for $85bn of this funding between 2015 and 2018., making it the sixth largest backer of fossil fuels in the world and the largest in Europe.

In an interview with the BBC Today programme at the end of last year Mark Carney, outgoing Bank of England governor who has been appointed United Nations special envoy for climate action and finance, underlined the need for the financial services to take more urgent action to curb fossil fuel investment.

Carney said: ‘A question for every company, every financial institution, every asset manager, pension fund or insurer: what’s your plan?

‘Four to five years ago, only leading institutions had begun to think about these issues and could report on them.

‘Now $120 trillion (£91 trillion) worth of balance sheets of banks and asset managers are wanting this disclosure [of investments in fossil fuels]. But it’s not moving fast enough.’

The shareholder resolution

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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