Barclays, a major player in the banking industry, has announced a significant shift in its financing strategy by revealing plans to cease direct funding for new oil and gas projects. This decision marks a notable departure from its previous support for the fossil fuel industry and comes amidst mounting pressure to address climate concerns.
The banking giant’s move includes imposing restrictions on lending to energy companies intending to expand their fossil fuel production activities. While Barclays has long been a key lender to the fossil fuel sector, its decision reflects a growing trend among financial institutions to align with sustainability goals.
Campaign groups have welcomed Barclays’ announcement but have simultaneously urged more comprehensive measures. Despite being Europe’s largest funder of the fossil fuel sector between 2016 and 2021, providing nearly $16.5 billion in 2022 alone, Barclays has faced increasing scrutiny over its environmental impact.
Pressure from environmental campaigners and public figures, including actress Emma Thompson and film director Richard Curtis, has intensified calls for Barclays to reconsider its support for fossil fuels. Last year, campaigners urged the removal of Barclays as a sponsor of Wimbledon, accusing the bank of profiting from climate disruption.
Barclays’ Climate Change Statement outlines its commitment to halt direct funding for projects to expand oil and gas production, particularly those in environmentally sensitive areas like the Amazon and the Arctic Circle. Additionally, the bank will impose restrictions on coal mining and coal-fired power generation lending.
While Barclays’ decision mirrors similar commitments made by other European banks, such as HSBC and Lloyds, critics argue that there are loopholes in the plan. Campaign groups like ShareAction emphasize the need for stricter measures, particularly regarding financing for companies exclusively focused on fossil fuel extraction, including fracking.
Make My Money Matter, another advocacy group, deems Barclays’ plan inadequate, emphasizing the ongoing financial support provided to companies involved in harmful fossil fuel projects worldwide.
Barclays maintains that oil and gas funding represents a small fraction of its activities. However, its decision to restrict financing for new oil and gas projects signals a significant step towards aligning its operations with sustainability objectives, albeit amid calls for further action.
