Barclays Is First European Bank to Face Vote on Climate Change

LAGOS (Capital Markets in Africa) – A group of Barclays Plc shareholders has filed what they say is the first climate change resolution at a European bank, taking aim at the lender’s support of fossil fuels.

Eleven institutional investors and more than 100 individuals urged Barclays to say how it will phase out financing energy firms that don’t align with the Paris Agreement climate goals, according to a statement from U.K. non-profit ShareAction, which coordinated the proposal.

Shareholders will vote on the resolution, which was filed Tuesday, at Barclays’ annual meeting in May.

Failure to move away from polluting industries “exposes the bank and its shareholders to heightened capital risks as decarbonisation accelerates,” said Natasha Landell-Mills, head of stewardship at Sarasin & Partners, which signed the resolution. “At a time of economic uncertainty, the board should not be taking on additional risks.”

Climate Protests
“We are working to help tackle climate change, and we meet with Share Action and other shareholders regularly to update them on our progress,” Barclays said in a statement.

Barclays has faced criticism for its continued relationship with fossil fuel companies. The bank is the industry’s biggest backer in Europe and the sixth-largest globally, financing $85.2 billion in the three years after the 2015 Paris accord to restrict worldwide emissions, according to the environmental group Rainforest Action Network.

At last year’s annual meeting, protesters interrupted Chief Executive Officer Jes Staley’s comments on the bank’s green policies with chants of “tell the truth.”

Overall, though, investor pressure on climate issues has achieved mixed success. The average support for shareholder proposals on the environment and climate change is just 28%, up from 22% in 2013, according to a review of U.S. companies by the consultancy firm EY. Shareholders passed some climate reporting resolutions at South Africa’s First Rand Ltd. and Standard Bank Group Ltd. last year.

At Barclays, retirement plan managers such as Brunel Pension Partnership and LGPS Central Ltd., as well as the Central Board of the Methodist Church, are among those who have signed the resolution. Data compiled by Bloomberg show none of them are top-30 investors in the bank.

Last January, Barclays said it would restrict its coal financing business globally by ending direct financing of greenfield thermal coal mines and halting such funding of construction or expansion of coal-fired power stations.

Barclays is one of the founding signatories of the United Nations’ Principles for Responsible Banking, which launched in September to align finance firms with international efforts to address climate change and other environmental and social issues. However, the bank didn’t join 36 firms who also signed the Collective Commitment to Climate Action, which involves taking concrete steps to financing a low-carbon economy that’s required to limit global warming to below 2 degrees Celsius.

The bank said it underwrote 27.3 billion pounds ($35.8 billion) in green bonds and renewable financing in 2018. It ranked as the 10th largest arranger of green bonds that year, according to data compiled by Bloomberg.

Source: Bloomberg Business News