Yahoo Finance Barclays defies green activists to back oil and gas
Barclays has defied green activists with a pledge to invest in new oil and gas projects to help Europe wean itself off Russian fossil fuel.
The bank said that it intends to take a "pragmatic" approach to energy projects amid fears that supplies risk running short across Europe following Vladimir Putin's invasion of Ukraine.
Bosses pledged to continue investment in oil and gas as a climate protester glued herself to a chair at the lender's annual general meeting in Manchester and fellow bank Standard Chartered was hit by protests in its own AGM.
It comes amid a reappraisal of fossil fuels across the City. Many finance companies have sought to cut down on their investments in the industry over climate change concerns in the past few years, with Norway's $1.4 trillion (£1.1 trillion) sovereign wealth fund announcing plans to sell out of oil and coal as long ago as 2019.
However, bankers and investors are now rethinking their position as the West scrambles to free itself from Russian influence.
In a document sent to shareholders, Barclays said: "The appalling invasion of Ukraine is starting to result in energy supply pressures in Europe and increased concerns over energy security and affordability, which governments will need support in addressing.
“We believe the financial services industry therefore needs to take a considered and pragmatic approach to near-term energy requirements.
"Barclays will participate fully in this discussion, alongside governments, businesses and other stakeholders.”
The bank said it was also “impractical” to restrict financing for expanding existing oil and gas projects, arguing this would have little impact as companies finance exploration from their own cash flows.
It added: “We believe continuing to support those companies that are transitioning is the right approach."
FTSE 100 producer Shell is expected to throw a fresh focus on energy prices on Thursday by unveiling record quarterly profits as Britain votes in local elections.
Analysts expect the company to announce a profit of £7bn, following rival BP’s £5.4bn profit announced on Tuesday.
Oil and gas prices have been high for months owing to the disruption caused by Russia’s war on Ukraine, as well as higher demand after the end of lockdowns.
The surge has sparked a cost of living crisis in the UK, triggering calls for a windfall tax to help households with a 54pc average hike in their energy bills.
Economists poured cold water on the proposal, saying it will deter investment and fail to raise enough money to make a meaningful difference.
James Smith, an analyst at ING, said the windfall tax proposed by Labour will not be enough to help households.
Barclays is seeking to reach net zero carbon emissions from its activities by 2050. The bank said that under its emissions targets, it effectively has “a carbon budget for financing oil and gas producers that is consistent” with keeping global warming within 1.5C.
Chairman Nigel Higgins told investors he hoped the company had “got the balance right” as it seeks to address climate concerns and support companies shifting to greener energy.
However, the proposals sparked protests from activists who set off fire alarms and criticised the bank for “greenwashing”.
One climate protestor reportedly shouted: “Your climate policy is not worth the paper it’s written on.”
Activists also reportedly targeted rival bank Standard Chartered’s meeting in London were heard chanting, "Life on Earth before your profit, Standard Chartered, please just stop it”.
