By Theo LeggettBusiness correspondent, BBC News9 February 2024Image source, Getty ImagesBarclays has declared that it will cease providing direct funding for new oil and gas projects. Additionally, the banking giant has announced limitations on lending to energy businesses looking to expand their fossil fuel production.Barclays is a significant lender to the fossil fuel industry, but has been facing increasing pressure to reduce its support for the sector. Campaign groups have welcomed the move, though they argue that it doesn’t go far enough. According to a report from environmental group Rainforest Action Network, Barclays was Europe’s biggest funder of the fossil fuel sector between 2016 and 2021, providing just under $16.5bn in 2022, which was notably lower than in previous years. In 2019 and 2020, the figure exceeded $30bn.However, the bank has been under pressure from environmental campaigners, shareholder activists, and even celebrities to lessen its support. In a document called the Climate Change Statement, Barclays stated that it will no longer provide direct funding for projects intended to expand oil and gas production, or for infrastructure related to such projects. It also declared that it will end direct funding for any oil and gas projects in the Amazon or in the Arctic Circle, or aimed at extracting, processing or transporting oil from oil sands. However, direct funding for specific projects only makes up a portion of Barclays’ overall lending to the sector. The bank stated that there will also be restrictions on new financing for energy groups themselves, with stricter measures for new clients than for existing ones. The plan doesn’t solely concentrate on oil and gas, as there will also be constraints on lending linked to coal mining and coal-fired power generation.Barclays isn’t the first bank in Europe to make such commitments. HSBC, Lloyds, BNP Paribas, Societe Generale, and Credit Agricole have all previously announced restrictions on funding for fossil fuels. The recent announcement was praised by ShareAction, a group that advocates for responsible investment, but it argued that there were loopholes in the plan.“Barclays is wrong not to have ruled out financing companies that focus exclusively on fossil fuel extraction,” it said. “This should include fracking, which is causing so much environmental and social harm and is an activity the bank is heavily exposed to.”Meanwhile, Make My Money Matter, the group that includes Thompson and Curtis, said that Barclays’ plan was “inadequate in scope and in ambition”. The chief executive, Tony Burdon, stated, “While they finally caught up with other major European banks like Lloyds by ruling out direct project finance for fossil fuels, the reality is this covers just a fraction of their oil and gas lending. This new policy lets them continue funnelling billions to those companies developing catastrophic new fossil fuel projects around the world.”Barclays has noted that oil and gas funding represents a very small proportion of its overall activities.
