Wednesday 11 November 2020 6:01 am

Barclays fossil fuel financing increases despite ‘net zero’ pledge

Barclays has increased its financing of fossil fuel firms despite setting a ‘net zero’ goal for itself earlier this year following investor pressure, according to a new report. 

The bank, which is Europe’s largest fossil fuel financer, provided $24.58bn (£18.55bn) in underwriting and lending to major fossil fuel companies between January and September this year.

Read more: Barclays outlines new climate policy amid mounting pressure from activists

HSBC, the second largest financer of fossil fuels, provided $19bn of fossil fuel financing during the same period, a report published today by Rainforest Action Network (RAN) showed.

“HSBC and Barclays’ climate hypocrisy knows no bounds,” said Adam McGibbon, campaigner at activist group Market Forces.

“These banks claim to support climate action, but there is no climate action that involves pumping more money into the fossil fuel industry,” he continued.

In the first three quarters of 2020, Barclays’ financing of fossil fuel firms increased $200m compared to the same period last year, the report found. 

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Barclays has come under sustained pressure from investors and campaigners over its record on climate issues. Investors launched a campaign in January, coordinated by Shareaction, calling for the lender to phase out fossil fuel lending. 

In March the lender set itself a target to reach “net zero” for its own carbon emissions and the activities it finances by 2050, but stopped short of committing to the aim.  

HSBC also announced plans to target net zero emissions across its entire customer base by 2050 earlier this year. 

While the lender’s $19bn of fossil fuel financing in the first nine months of 2020 represents a decrease on the $21.58bn it provided in the same period last year, RAN said the drop “does not represent a significant enough curbing of fossil fuel financing for a bank that is committed to becoming net-zero”. 

Read more: HSBC to set aside $1 trillion in green financing, targets net zero emissions by 2050

“Barclays and HSBC’s ‘net zero by 2050’ commitments are only worth their paper if this has rapid and deep consequences for their ongoing financing of the fossil fuel industry today,” said Johan Frijns of campaigning organisation Banktrack. 

“You cannot expect to be praised for making commitments for 30 years from now while continuing to pour billions into coal, oil and gas companies,” he continued. 

“HSBC recognises the role of the financial sector in addressing climate change,” a spokesperson for the bank said.

“We do not support new thermal coal mines and have not financed any new coal fired power plants anywhere since April 2018,” they added.

A spokesperson for Barclays said: “We agree that the end goal for all of us is a zero carbon economy, which is why we set an ambition to be a net zero bank by 2050.”

“As we move towards that goal, we will finance energy producers providing for our energy needs today and who are actively investing in the transition from fossil fuels. Like most businesses during the pandemic, they needed additional funding this year,” the spokesperson added.

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