Eleven institutional investors, which collectively manage £130bn and include big British public pension funds Brunel Pension Partnership and LGPS Central, as well as 100 individual shareholders, co-filed the proposal.
The resolution calls on Barclays to publish a plan to phase out financing companies in the energy sector and gas and electric utilities that are not aligned with the Paris climate agreement, which aims to keep a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels.
The resolution is the latest sign that investors’ focus on climate change has extended beyond oil, gas and mining to sectors such as banking, which provides a vital source of capital to fossil fuel producers.
The proposal, the first climate change resolution at a European bank, will be put to a vote at Barclays’ annual meeting in May.
The group of shareholders called on the Barclays board to support it, as concerns grow about the potential financial impact of climate change.
Mark Carney, the outgoing Bank of England governor, has warned that companies and investors must step up planning for climate change, arguing many corporate assets were at risk of becoming worthless.
Jeanne Martin, campaign manager at ShareAction, the charity that has co-ordinated the shareholders, said Barclays was singled out because it lags behind its peers and ranks as the biggest financier of fossil fuel companies in Europe.
“It has one of the weakest energy policies [among banks] in Europe. Barclays not only has some catching up to do [with its peers] but it also needs to take a more proactive stance on fossil fuel financing,” she said.
According to ShareAction, Barclays has provided more than $85bn of finance to fossil fuel companies and high-carbon projects since the Paris Agreement was signed in 2015.
It said this makes it the world’s sixth-largest backer of fossil fuels, and constitutes the highest level of fossil fuel financing of any European bank, exceeding its peers by $27bn.
Barclays said: “We are working to help tackle climate change, and we meet with Share Action and other shareholders regularly to update them on our progress.”
One person briefed on Barclays’ climate policy said it was unfair to compare its exposure to fossil fuel companies with other European banks because it has a large US investment bank, arguing that shareholders should instead consider it alongside Wall Street peers.
The bank last year published a new policy for how it conducts business with companies involved in carbon-intensive industries, but has not ruled out funding tar sands, a type of petroleum deposit, or coal.
In contrast, BNP Paribas said in 2017 that it would stop doing business with companies whose primary activities involves oil and gas extracted from shale deposits or tar sands. Crédit Agricole and Standard Chartered have also more stringent policies on financing fossil fuel producers.
Natasha Landell-Mills, head of stewardship at Sarasin & Partners, which co-filed the resolution, said: “Barclays needs to be acting much more urgently to ensure it has the right [climate change] policies in place to protect its shareholders’ capital.”
ShareAction said the Barclays resolution is the first of a series of actions it planned for 2020 that will put financial services to the test on climate change.
US banks could also come under pressure over climate change in 2020. A coalition of investors have filed climate-focused resolutions at big banks including JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, and Morgan Stanley, although the banks could look to block the vote.
Banks in other countries, including Australia and South Africa, have also been hit with climate change resolutions in recent years.
REFS
Published on ft.com