Barclays has declared its cessation of direct funding for fresh oil and gas initiatives. The banking behemoth also disclosed its intention to limit lending to energy enterprises intending to expand their fossil fuel output.
Despite being a substantial lender to the fossil fuel industry, Barclays has faced escalating pressure to mitigate its backing for this sector.
This move by Barclays, though welcomed by campaign groups, is deemed insufficient by many. While the bank pledges to cease direct funding for projects aimed at bolstering oil and gas production or associated infrastructure, environmental organizations stress that more comprehensive measures are necessary.
According to a report from the Rainforest Action Network, Barclays emerged as the largest financier of the fossil fuel sector in Europe between 2016 and 2021, extending nearly $16.5 billion in 2022.
However, this figure represents a notable decline from previous years, with figures surpassing $30 billion in 2019 and 2020.
The mounting pressure on Barclays to revise its stance on fossil fuel financing has come from various quarters, including environmentalists, shareholder activists, and notable personalities like Emma Thompson and Richard Curtis, who called for the bank’s removal as a sponsor of Wimbledon, citing its association with climate change upheaval.
In its Climate Change Statement, Barclays delineated its decision to cease direct funding for oil and gas expansion projects, as well as ventures in the Amazon or Arctic Circle and those involved in oil sands extraction. However, this policy alteration only constitutes a segment of Barclays’ broader lending to the sector.
The bank has also imposed constraints on new financing for energy entities, with stricter measures applying to new clients compared to existing ones.
ShareAction criticized Barclays for not precluding financing for firms exclusively focused on fossil fuel extraction, including fracking, an activity to which the bank has substantial exposure.
Make My Money Matter, another advocacy group, labeled Barclays’ plan as inadequate, both in scope and ambition. While acknowledging the bank’s strides in ceasing direct project finance for fossil fuels, the group asserts that this only scratches the surface of its oil and gas lending.
Barclays, on its part, emphasizes that oil and gas funding constitutes a minor fraction of its operations.
