Ahead of the Barclays annual general meeting today (7 May), ShareAction and the 11 institutional investors behind Resolution 30 – aimed at compelling the bank to bring its energy financing in line with the goals of the Paris Agreement – submitted the below statement to the Barclays’ board. 

We would like to make this statement on behalf of the institutional filers of Resolution 30.

We would first like to thank the board for engaging with us on climate change-related issues since 2016 and on Resolution 30.

Regardless of the voting result today, we know that many of your shareholders have indicated support –either privately or publicly – for resolution 30. This includes Amundi, Epworth Investment Management, Hermes EOS, Jupiter asset management, LAPFF, M&G Investments, Nest, amongst many more.

We strongly believe it is in shareholders’ and the company’s own interests to phase out non-Paris aligned fossil fuel financing. Decarbonisation across sectors is expected to accelerate with tightening regulations, which increases credit risks for fossil fuel intensive lending. This risk needs to be properly priced in, and reduced by curtailing support for the riskiest activities. It would also ensure that the bank performs better in the Bank of England’s upcoming round of climate stress testing, which will inform capital requirements for banks. The current oil price environment has also demonstrated the risks of too great of an exposure to the oil sector. Finally, the increasing risk of climate-related litigation, economic loss, and reputational harm demonstrates the need for Barclays to phase out non-Paris aligned fossil fuel financing.

We recognise and welcome the steps that Barclays has taken to start addressing shareholders’ concerns by setting an ambition to be a net zero bank by 2050, and to “set, disclose and implement a strategy, with targets, to transition its provision of financial services across all sectors (starting with, but not limited to, the energy and power sectors) to align with the goals and timelines of the Paris Agreement.”

However, Barclays’ new energy policy suggests a gap between what the bank intends to deliver in the long-term and the kind of activity it finances now. The co-filers urge the bank to show evidence that all of Barclays’ lending activities, including those that bear the most climate risk, such as coal, fracking and tar sands, will be addressed with Paris agreement urgency.

Schroders’ latest Climate Progress Dashboard finds that current levels of fossil fuel production growth are compatible with a 5.9°C global temperature rise. Against this backdrop, the need for Barclays, which has provided the most finance for fossil fuel expansion of any European bank since the Paris Agreement, to align its fossil fuel financing activity with the Paris goals is clear.

We thus urge the bank to make the phasing out of non-Paris aligned fossil fuel activities an integral part of its strategy to meet its net zero by 2050 ambition.

We look forward to continue engaging with you on this very important issue in the coming months.