After being one of the biggest backers of fossil fuels in Europe, Barclays, the big British bank, is accelerating its plans to move away from fossil fuels -- in part as a response to the Russian war on Ukraine and the need to end reliance on that country's oil and methane imports.
“The appalling invasion of Ukraine has made it even more imperative to accelerate the energy transition,” Barclays Chairman Nigel Higgins said Tuesday in a statement quoted by Bloomberg News.
While most banks are getting roundly criticized for slow-walking their transition away from funding fossil fuels, the Barclays announcement is a welcome bit of news -- if the bank lives up to its chairman's promise.
Since the Paris Agreement was reached in 2015, Barclays has led European banks in funding fossil fuel bonds -- to the tune of a whopping $58 billion. Over the same period it issued $40 billion in green bonds -- making it the fifth-largest renewable lender.
In a recent climate report cited by Bloomberg, Barclays now said that the war will increase "demand for investment in low-carbon energy infrastructure." That demand will be met, in part, by Barclays, the bank said.
In a statement, Barclays said it would target a 30% reduction in the CO2 intensity of its power portfolio by 2025. The company would also cut the absolute emissions of its energy portfolio by 15% in the same period, according to a Bloomberg report.
In addition, executive directors at the bank will see their salaries tied to their ability to achieve the climate goals the bank has laid out.
The move comes just as regulatory and advocacy groups are putting more pressure on financial institutions to change their investment strategies and respond to the risk that climate change poses to their portfolios.
A recent report from the Paris-based climate nonprofit Reclaim Finance indicates that Barclays isn't the only financial services firm with work to do to correct its policies related to fossil fuel funding.
A survey of 150 financial institutions by the advocacy group Reclaim Finance found that less than half had any policies in place related to governing or managing their fossil fuel investments -- despite pledges to reduce their contributions to climate change.
The tool, called the Oil and Gas Policy Tracker which was launched to call out greenwashing at investment firms.
“The Oil and Gas Policy Tracker is a tool to detect greenwashing practices in the finance sector. It confirms that despite their net zero pledges, many GFANZ members don’t even have an oil and gas policy. And with one glowing exception, French la Banque Postale, those that do have a policy can still support the development of new oil and gas plans," said Lucie Pinson, director at Reclaim Finance.. Despite their climate pledges, they are failing the most basic test for any institution aiming to align their portfolio with 1.5°C. And as Putin’s war on Ukraine reveals, they also make the world more unstable while bankrolling future conflicts”,