Barclays Pledges Net Zero Emissions by 2050 -- Update

By Maitane Sardon

Barclays PLC said Monday that it will aim to be a net-zero bank by 2050 by aligning the emissions of the activities it finances across all sectors with the Paris Agreement on climate change.

The British bank, which has come under fire from investors for having a weaker climate policy than some of its European rivals, said it will start with the energy and power sectors and provide targets to measure its progress in 2021.

Barclays is the largest fossil-fuel financier in Europe and the sixth globally, having provided more than $118 billion to fossil-fuel companies and high-carbon projects such as tar sands and Arctic oil and gas since the Paris agreement was signed in 2016, according to a report by Rainforest Action Network, an environmental organization.

Some of the measures the bank will implement will lead to a reduction in the carbon-dioxide intensity of its power and energy portfolios of 30% and 15% respectively by 2025, Barclays Chairman Nigel Higgins said in a letter to shareholders included in the bank's annual ESG report.

Mr. Higgins said Barclays will seek to prioritize its lending to companies aligned with the Paris agreement, reduce its exposure to the most carbon-intensive forms of energy production and re-weight its financing to reflect the proportions of energy required globally from different sources to meet the Paris targets.

"It is true that the bank... has not addressed the climate challenge as fully and as early as we now all wish had been the case," Mr. Higgins said. "This is particularly true of our financing for thermal coal, where our historic exposures are higher than we would like, and where we are now introducing new restrictions"

He said Barclays will steadily reduce its thermal-coal financing and only provide finance to firms whose thermal-coal activities represent less than 30% of revenue by 2025 and less than 10% of revenue by 2030.

Investors in the British bank welcomed the announcement but noted the bank has urgent work to do to curb its fossil-fuel financing in the short term. They encouraged other shareholders to back a resolution filed by campaign group ShareAction and supported by investors representing around $2 trillion in assets, including money managers Jupiter Asset Management Ltd., Sarasin & Partners and Amundi, and Nest, the largest U.K. pension fund by members.

The resolution calls for the phasing out of financing activities to the most carbon-intensive energy companies. It will be voted on at Barclays's annual general meeting on May 7, but faces opposition from the bank's board of directors.

"What matters now is that the board sets robust nearer-term targets that leave no doubt about its determination to deliver net-zero emissions by 2050," said Natasha Landell-Mills, head of stewardship at Sarasin & Partners.

Barclay's announcement is the latest environmental pledge by a European bank. Earlier this month, Swiss bank UBS Group AG said it would no longer finance new offshore-oil projects in the Arctic, thermal-coal mines or oil sands on undeveloped land. In February, Royal Bank of Scotland Group PLC said it would end financing for coal by 2030 and place stricter rules on oil-and-gas majors it works with.

Write to Maitane Sardon at [e-mail]

(END) Dow Jones Newswires

March 30, 2020 10:48 ET (14:48 GMT)

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