Barclays has declared an end to its direct financing for new oil and gas ventures, in addition to tightening lending criteria for companies seeking to increase fossil fuel production.
This move comes as Barclays, a significant financier in the fossil fuel industry, faces escalating demands to lessen its sector involvement.
Environmental organizations have praised this development, yet argue that the measures are insufficient.
A Rainforest Action Network report highlighted Barclays as Europe’s top financier of the fossil fuel industry from 2016 to 2021, with the bank allocating nearly $16.5bn (£13bn) to the sector in 2022, a notable decrease from the over $30bn funded in 2019 and 2020.
The bank has faced criticism from environmental groups, activist shareholders, and celebrities for its financial support of the sector.
Last year, a campaign led by celebrities including Emma Thompson and Richard Curtis urged the All England Lawn Tennis Club to sever ties with Barclays as a Wimbledon sponsor, criticizing the bank for “profiting from climate chaos.”
In its Climate Change Statement, Barclays committed to halting direct funding for projects aimed at increasing oil and gas production or infrastructure associated with such expansions. It also vowed to cease direct funding for oil and gas projects in the Amazon and Arctic Circle, as well as those involved in the extraction, processing, or transportation of oil sands.
However, project-specific financing represents just a segment of Barclays’ total funding to the fossil fuel industry. The bank plans to implement financing restrictions on energy companies, with stricter criteria for new clients compared to existing ones.
The initiative extends beyond oil and gas, including limitations on financing related to coal mining and coal-fired power projects.
While Barclays joins other European banks like HSBC, Lloyds, BNP Paribas, Societe Generale, and Credit Agricole in adopting such policies, the announcement has drawn criticism for its perceived loopholes.
ShareAction, an organization advocating for responsible investing, criticised the plan for not excluding finance for companies solely focused on fossil fuel extraction, including fracking, which the bank significantly supports.
