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Pressure mounts on Barclays to ditch fossil fuel lending

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·Senior City Correspondent, Yahoo Finance UK
·3-min read
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Greenpeace activists gather at the main entrance of Barclays bank hedquarters in Canary Wharf in protest over the bank's refusal to stop funding pipelines that take oil from Canada's tar sands to market in the USA and Asia, London on July 19, 2018. Activists scaled the entrance to redress the headquaters sign in an oil drip effect as well as others entering the building dressed as bankers whilst playing recorded messages from Barclays customers that are in opposition to the bank's funding of the tar sands pipelines. (Photo by Alberto Pezzali/NurPhoto via Getty Images)
A protest sign outside Barclays's Canary Wharf headquarters in 2018. (Alberto Pezzali/NurPhoto via Getty Images)

Pressure is growing on Barclays (BARC.L) to curb lending to fossil fuel companies, with a significant investor publicly backing calls for the bank to change its ways.

Jupiter Asset Management (JUP.L) on Tuesday said it would support a shareholder campaign calling for Barclays to put a stop lending to fossil fuel and utility companies that don’t align with the goals of the 2015 Paris agreement.

Investor campaign group ShareAction filed a resolution in January calling for Barclays to publish a plan to gradually reduce its fossil fuel lending. Investors will vote on ShareAction’s proposal at Barclays’s annual general meeting (AGM) in May. It will be the first such vote at a European bank.

Read more: Investors pressure Barclays to ditch fossil fuel lending

Ashish Ray, head of governance and sustainability at Jupiter Asset Management, said on Tuesday that addressing climate change was “an important focus for Jupiter”.

“As investors, we expect boards and management teams to maintain a long-term mindset and appropriately manage key risks to their business,” Ray said. “We see the goals of the resolution as entirely consistent with this approach.”

Eleven institutional investors and 130 retail investors, representing a combined 0.2% of Barclays stock, initial backed the AGM vote. Several other institutions have since come out in support, including Europe’s largest asset manager Amundi, the Church of England, and Nest, the UK’s largest pension scheme by members.

However, Jupiter Asset Management is the most significant Barclays investor to so far back the motion. The fund manager holds 1.15% of Barclays’s stock, making it the 24th largest investor in the bank. Jupiter Asset Manager invests £42.8bn of investor funds globally.

Read more: BlackRock vows to address climate change: 'Climate risk is investment risk'

Jeanne Martin, campaign manager at ShareAction, said in a statement: “Barclays’ top shareholders are becoming increasingly dissatisfied with the company’s close ties with the fossil fuel industry in times of raging wildfires, sweeping heatwaves and catastrophic floods.

“We urge Barclays to listen to its shareholders and commit to phasing out support for the fossil fuel industry and utilities that are not aligned with the Paris climate goals. A good first step for the bank would be to stop pouring millions into the coal and tar sands industries, two of the most carbon-intensive sources of energy on Earth.”

Barclays has provided $85bn of financing to fossil fuel companies and high-carbon emitting industries since the 2015 Paris climate summit, according to campaign group Rainforest Action Network. It makes Barclays the biggest funder of polluters in Europe and the sixth biggest in the world.

Read more: Bank of England Carney: Climate no longer 'niche' issue for investors

A Barclays spokesperson said: “We continue to engage with ShareAction and other shareholders on this issue and will make a further statement at the appropriate time.”

The shareholder pressure comes amid rising concern about climate change across the worlds of business and finance. Larry Fink, the chairman of the world’s biggest investment company BlackRock, said in a letter to clients in January that his company would make sustainability its top priority and Bank of England Governor Mark Carney has repeatedly warned finance companies about the dangers of climate inaction over the last year.

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