By Michael Kind, Campaign Manager, ShareAction

Despite dire scientific warnings, banks continue to pump billions of pounds into fossil fuels.

Barclays is one of those banks – Europe’s biggest by a long way in fact.

Since the signing of the Paris Agreement – a global deal that aims to limit climate change – it has pumped $118 billion into fossil fuels – including coal and tar sands.

But shareholder activism is on the rise to tackle this. Last December, over 130 ShareAction supporters gave a Christmas gift to the planet, by buying a single share in Barclays bank. Adding all those shares together allowed us to file the first shareholder resolution on climate change at a UK bank, asking the bank to phase out its support of fossil fuels.

People power has Barclays panicked

“I’ve been a keen supporter of ShareAction since 2013, and started paying into a pension with Universities Superannuation Scheme (USS). I was shocked to find out about all the horrific things my savings were being invested in – from arms, to tobacco, to fossil fuels companies causing catastrophic climate change,” said Ellie Harrison, a co-filer of the Barclays resolution and ShareAction supporter.

She realised the collective power of shareholder activism that she and other individuals have to effect change in the financial system.

“The board must have panicked, as when I got my shareholder papers through – inviting me to vote on the resolutions ahead of the AGM – they had written their own promising to decarbonise their lending by 2050,” says Ellie. While the Barclays resolution was a welcome proposal, it did not include sufficient short-term phase out targets that the ShareAction resolution was calling for.

“I voted for both!” says Ellie.

Following the news of the shareholder resolution, Barclays planned to move its AGM proceedings to Glasgow before lockdown restrictions.

Rebecca Warren, another long-term supporter of ShareAction and co-filer of the resolution agreed that the resolution had the bank on the run.

“It is a sure sign that ShareAction has rattled a company if they relocate their AGM to Scotland. While for most of us lockdown was an unwanted restriction, quite possibly the directors of Barclays were relieved that their shareholders (now including more than one hundred ShareAction campaigners) would not be able to challenge them face-to-face.”

Instead of holding a virtual event for shareholders, like some companies did this AGM season, Barclays asked for questions to be submitted online. One such question came from Rebecca.

She asked when the bank’s “stakeholders (not only your shareholders – as a major global bank, your activities affect everyone, so we are all your stakeholders) expect to see details of how you will take the steps to meet the requirements of the IPCC and play your part in keeping the Earth habitable?”

“To their credit, they sent a quite detailed answer, even if it did not have the urgency of my question,” said Rebecca, including stating that their “ambitious steps were outlined in our shareholder resolution, communicated to you in advance of the AGM on 7 May.  We were pleased that this was supported by the vast majority of voters and it is worth noting that this resolution is binding so we are fully committed to implementing its contents”.

“They can be sure we are watching,” she told us.

A single share can kick-start a movement

Shareholder activism can be a positive tool for change.

“If I bought a share in any company (even if it’s just one), I could get ‘investors insights’ on their operations, and access to their board,” says Ellie. “And the process does not have to be complicated. “ShareAction provided easy-to-follow instructions on how to purchase my certificated share. I called up the share dealer and placed my order, an enjoyably subversive act just in the run-up to Christmas. It cost me £26.69. I sent the details through to ShareAction and they did all the rest of the work,” she added.

Not only did campaigners like Rebecca and Ellie take part, but we were also joined by 11 institutional investors who wanted to encourage Barclays to set phase-out targets for its financing of fossil fuel companies. “The resolution was brilliant, and got lots of media coverage,” said Ellie.

This gave ShareAction the necessary profile to garner further support from the investment community, including the likes of Nest, Jupiter Asset Management, EOS Federated Hermes, and M&G Investments.

An unprecedented result thanks to the movement of shareholder activists

In the end the ShareAction resolution got 24% of votes, unprecedented for a resolution of this kind in the UK. Barclays’ own resolution passed almost unanimously. The level of support for our resolution from a significant base of shareholders is thanks to the commitment of 130 supporters, shareholder activists, and co-filers. It means we have the backing to be able to push Barclays to actually set targets in the short-term to realise its ambition to be net-zero by 2050.

Rebecca said “I did vote my one share – voting in favour of both the climate change resolutions, as instructed. Since I have only one share it was a symbolic gesture, but symbolic gestures do matter.”

Ellie added “Although it did not pass, it was a massive achievement for everyone involved. I’m so glad I was able to play a small part in this historic action and I encourage others to get involved when we take on the next one.”

 If this is what we achieved with just 130 people, imagine what else is possible. Will you get involved in shareholder activism next time? Get in touch with us here.