Banking giant to cease oil and gas funding

Banking group Barclays  has said it will commit $1 trillion into investments to drive the world’s transitions to sustainable energy products as it also announced it is to refuse to invest in new oil and gas projects.

The pledges came as the bank published its revised Climate Change Statement to progress its climate strategy and continue its focus on clients actively engaged in the energy transition.

Barclays said it will commit to finance $1trillion of Sustainable and Transition Finance by 2030.

Its updated Climate Change Statement highlighted:

  • No project finance, or other direct finance to energy clients, for upstream oil and gas expansion projects or related infrastructure.
  • Restrictions for new energy clients engaged in expansion.
  • Restrictions on non-diversified energy clients engaged in long lead expansion.
  • Additional restrictions on unconventional oil and gas, including Amazon and extra heavy oil.
  • Requirements for energy clients to have 2030 methane reduction targets, a commitment to end all routine / non-essential venting and flaring by 2030 and near-term net zero aligned Scope 1 and 2 targets by January 2026.
  • Expectation for energy clients to produce transition plans or decarbonisation strategies by January 2025.

“In the International Energy Agency NZE scenario, new long lead time upstream oil and gas projects are not required on a 1.5°C-aligned pathway,” It added. “For current and future (declining) global demand to be satisfied, investment is needed to support existing assets while clean energy is scaled. Barclays understands the critical importance of energy being secure, reliable and affordable for our customers and clients.

“Barclays will continue to support an energy sector in transition, focusing on the diversified energy companies investing in low carbon and with greater scrutiny on those engaged in developing new oil and gas projects.”

The bank added the scale of its business gives it the opportunity to help finance the energy transition; to use its global reach, products, expertise and position in the global economy to work with its clients, including those in the energy sector, as they transition to a low-carbon business model.

Laura Barlow, Group Head of Sustainability, said, “Addressing climate change is a critical and complex challenge. We continue to work with our energy clients as they decarbonise and support their efforts to transition in a manner that is just, orderly and addresses energy security. Today we strengthen our commitment to the energy transition, with policies that will focus our capital and resources to the energy companies that play a key role in the transition.”

Daniel Hanna, Head of Sustainable Finance, Corporate and Investment Bank, adds, “Capital is critical to the energy transition, to decarbonise hard-to-abate sectors for the world to reach net zero emissions and create a resilient economy. As the number two ranked clean energy advisor globally by BloombergNEF, Barclays is strongly positioned with our capabilities and experience, global reach and role in the global economy to accelerate the investment needed for real-world decarbonisation, while supporting our energy clients’ transition.

“Publishing our Transition Finance Framework reinforces our commitment to be transparent in how we are mobilising $1trillion of Sustainable and Transition Finance by the end of 2030 while Barclays continues to be a leading global clean energy adviser and financier, unlocking growth from the energy transition.”