A recent announcement made by Barclays indicates that the company would no longer provide direct finance for new oil and gas projects.
The massive financial institution has also announced that it will limit the amount of money it lends to energy companies who intend to increase their output of fossil fuels.In spite of the fact that it is a significant lender to the fossil fuel industry, Barclays has been facing increasing pressure to reduce the amount of support it provides to the sector.
Even while they were pleased with the move, campaign organizations felt that it did not go far enough.
A research that was compiled by the environmental organization Rainforest Action Network indicates that between the years 2016 and 2021, Barclays was the most significant contributor to the fossil fuel industry in Europe.
In 2022, it contributed little less than $16.5 billion (£13 billion), despite the fact that this figure was substantially lower than in prior years. Over thirty billion dollars was the total amount in both 2019 and 2020.
On the other hand, environmental rights activists, shareholder activists, and even celebrities have been exerting pressure on the bank to reduce the amount of support it provides.
In the previous year, a group of individuals, which included the actress Emma Thompson and the film director Richard Curtis, demanded that the All England Lawn Tennis Club withdraw Barclays from its role as a sponsor of Wimbledon. That the bank was "profiting from climate chaos" was the accusation that they made.
As part of what it referred to as a Climate Change Statement, Barclays made the announcement that it would no longer offer direct funding for projects that were intended to increase oil and gas output, as well as infrastructure that was associated with such initiatives.
It also stated that it would stop providing direct finance for any oil and gas projects that were located in the Arctic Circle or the Amazon, or that were focused at extracting, processing, or transporting oil from oil sands.
Nevertheless, direct funding for particular projects constitutes only a portion of the total amount of lending that Barclays provides to the sector.
In addition, the bank stated that there would be limitations placed on new financing for energy organizations themselves; however, these limitations will be more stringent for new customers than they are for existing customers.
The plan does not solely concentrate on the oil and gas industry. Restrictions will also be placed on lending that is associated with coal mining and power generation that is powered by coal.
The introduction of such pledges is not something that Barclays is the first bank in Europe to do. A number of financial institutions, including HSBC, Lloyds, BNP Paribas, Societe Generale, and Credit Agricole, have previously declared their intention to restrict finance for fossil fuels.
ShareAction, an organization that advocates for ethical investment, expressed its approval of the most recent announcement; but, it also expressed its dissatisfaction with the plan, stating that it had loopholes.
"Barclays is wrong not to have ruled out financing companies that focus exclusively on fossil fuel extraction," the statement stated.
"This should include fracking, which is causing so much environmental and social harm and is an activity the bank is heavily exposed to."
Barclays' approach, on the other hand, was deemed "inadequate in scope and in ambition" by Make My Money Matter, a group that includes both Thompson and Curtis.
"While they finally caught up with other major European banks like Lloyds by ruling out direct project finance for fossil fuels, the reality is that this covers just a fraction of their oil and gas lending," said Tony Burdon, the chief executive officer of the company.
"This new policy lets them continue funnelling billions to those companies developing catastrophic new fossil fuel projects around the world."
It has been brought to the attention of Barclays that the funding for oil and gas accounts for a relatively minor fraction of the company's overall activity.