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Responding to investor strain, Barclays presents new, beefed up local weather coverage

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After three months of investor discussions, Barclays has introduced its ambition to be a internet zero financial institution by 2050. At its upcoming annual basic assembly, the financial institution recommends its shareholders vote in favour of a particular local weather decision which comprises commitments to align its financing actions with the Paris Settlement.

The announcement follows an earlier decision introduced by a gaggle of buyers in January of this 12 months, led by accountable funding charity ShareAction. In response to this, ClientEarth CEO James Thornton wrote to Barclays’ Board reminding board members of their authorized duties to deal with local weather change dangers.

Banks are dragging their ft on the local weather disaster

Local weather change is an enormous risk to communities and the setting worldwide, and it additionally destroys wealth. Bodily property and operations are already being hit by excessive climate, and that is set to worsen. Monetary establishments face climate-related dangers that go far past the problem of social accountability – left unchecked, these dangers threaten to destabilise the worldwide economic system and destroy trillions in worth.

Banks have a significant function to play within the transition away from fossil fuels. But they’re massively investing in a few of the most carbon-intensive and polluting industries. Even for the reason that Paris Settlement was signed in December 2015, 33 of the world’s largest banks have invested some $2.7 trillion into fossil gas corporations.

Public strain is mounting. Our latest survey exhibits that greater than six in ten folks (62%) didn’t know that their financial institution could possibly be investing their cash in fossil fuels, and 67% of younger folks suppose monetary establishments and banks must be legally accountable in the event that they don’t ditch fossil fuels.

After years of opaque practices from banks, the investor neighborhood is now urging banks to align their financing choices with the Paris local weather objectives.

Legal professionals again the primary climate-related shareholder decision at a European financial institution

In January, 11 main buyers filed a decision asking Barclays — one of many UK’s high banks — to section out its financing of fossil gas corporations that aren’t aligned with the Paris local weather objectives. Spearheaded by charity ShareAction, the decision was filed by buyers collectively managing £130bn. It was the primary climate-related shareholder decision at a European financial institution.

In a letter to Barclays’ Board, ClientEarth CEO James Thornton reminded board members of their authorized obligations to deal with local weather change dangers.

He additionally argued that any determination by Barclays to actively proceed supporting companies which are straight accelerating international temperature rise makes the financial institution complicit within the environmental and financial injury these companies trigger.

Barclays bows to investor strain

Barclays responded by placing ahead its personal local weather decision, through which it pledged to align all of its financing actions with the objectives and timelines of the Paris settlement, beginning with the vitality and energy sectors, and to publish “clear targets” to trace its progress.

ClientEarth lawyer Daniel Wiseman mentioned: “With this decision, Barclays has taken constructive motion on local weather. The resolutions now earlier than shareholders current an historic alternative to remodel Barclays from an trade laggard to a worldwide chief on local weather. They present why it’s so important that buyers flex their stewardship muscle tissues and demand motion.”

However Barclays remains to be lagging behind its European friends on local weather motion. Since 2015, Barclays has invested £100bn into fossil gas corporations. That makes it the biggest financier of fossil fuels in Europe, rating seventh on the planet. The financial institution additionally elevated its financing for oil, gasoline and coal corporations simply final 12 months.

Wiseman added: “The decision proposed by Barclays is an effective sign of intent – however it will likely be meaningless if not backed up by a powerful and credible technique to align all its actions with the Paris Settlement objectives.

“Barclays’ transfer sends a transparent sign to different monetary heavyweights: persevering with to finance actions that exacerbate local weather change is unsustainable and compounds the dangers local weather change presents to enterprise and society at massive. Banks, pension funds and all different monetary providers corporations ought to pay attention to these dangers, in addition to the authorized dangers which can ensue if they don’t align with rising trade requirements.”

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