Barclays (BARC.L) has pledged to become net carbon neutral by 2050, succumbing to investor pressure to improve its environmental credentials.
The bank said in a statement on Monday 30 March it would align its entire operations to the principles of the 2015 Paris climate agreement. It means both Barclays and the activities it finances will have to meet the agreement’s climate goals.
Barclays said its audit of activities would start with the financing of energy and power companies, given the large amount of greenhouse gases they generate. The bank pledged to release “transparent targets required to judge progress” from next year.
Barclays said it would aim to provide at least £100bn ($124bn) in green financing by 2030 and will invest £175m into environmental innovation over the next five years.
“Our new ambition to be net zero, and our commitment to aligning our financing portfolio across all sectors to the goals of the Paris Agreement, will mean we can play much more of a leading role in meeting the climate challenge and in financing energy transition,” Barclays chairman Nigel Higgins said.
“Ours is a clear and implementable strategy, and will be backed up with specific targets and regular reporting to ensure we implement it.”
The green pledges follow pressure from investors. Campaign group ShareAction filed a resolution in January calling for Barclays to publish a plan to gradually reduce its fossil fuel lending. The group said Barclays had provided $85bn of financing to fossil fuel companies and high-carbon emitting industries since the 2015 Paris Agreement, making it the biggest funder of polluters in Europe and the sixth biggest in the world.
ShareAction’s resolution set up an investor vote at Barclays’ annual general meeting in May, the first such ballot on environmental matters at a European bank. In recent weeks, a growing number of shareholders had pledged to vote in favour of the resolution, including Europe’s largest asset manager Amundi, the Church of England, and the UK’s largest pension scheme by members, and Jupiter Asset Management.
“Today’s news from Barclays is a win for investor stewardship in the UK,” said Wolfgang Kuhn, director of finance sector strategies at ShareAction. “Nevertheless, announcing a 30-year ambition is arguably the easy bit.”
He called for investors to still vote in favour of ShareAction’s AGM motion, which suggests more ambitious and targeted plans for the bank.
Higgins said on Monday: “I would like to thank all of our stakeholders who have engaged with us so constructively since the autumn of last year on our shared goal of tackling climate change.”