UK in­vestors pulling out of fos­sil fuel firms

The Punch - - INTERNATIO­NAL BUSINESS -

BAR­CLAYS is be­ing urged to stop of­fer­ing loans to fos­sil fuel com­pa­nies as part of the first ever share­holder cli­mate res­o­lu­tion aimed at a UK bank.

A group of 11 pen­sion and in­vest­ment funds man­ag­ing more than £130bn worth of as­sets have filed a res­o­lu­tion call­ing for Bar­clays to set clear tar­gets to phase out ser­vices to en­ergy com­pa­nies that fail to align with Paris cli­mate goals, ac­cord­ing to The Guardian.

That in­cludes lend­ing to spe­cific fos­sil fuel projects or for com­pa­nies them­selves, which in­clude elec­tric­ity and gas providers which fall foul of cli­mate tar­gets. The Paris agree­ment re­quires emis­sions to peak then fall rapidly to reach net-zero by 2050.

The res­o­lu­tion, spear­headed by the cam­paign group Shareac­tion and signed by more than 100 ad­di­tional in­di­vid­ual share­hold­ers, will be voted on at Bar­clays an­nual gen­eral meet­ing in May 2020.

The Brunel Pen­sion Part­ner­ship – which man­ages £30bn for lo­cal govern­ment pen­sion schemes across coun­ties such as Devon, Dorset, Ox­ford­shire, Som­er­set and corn­wall – was among the in­sti­tu­tional in­vestors back­ing the res­o­lu­tion. The 11-strong group owns about 0.2 per cent of Bar­clays shares.

BPP’S chief ex­ec­u­tive, laura chap­pell, said the cli­mate cri­sis was putting its own client’s re­tire­ment ben­e­fits at risk. “cli­mate change poses sig­nif­i­cant risks to global fi­nan­cial sta­bil­ity and could thereby cre­ate cli­mate-re­lated fi­nan­cial risks to our own busi­ness op­er­a­tions, port­fo­lios and client part­ner funds, un­less ac­tion is taken to mit­i­gate these risks.”

She added, “We hope the Bar­clays Board for­mally sup­ports this res­o­lu­tion.”

A re­cent study com­mis­sioned by groups in­clud­ing the Rain­for­est Ac­tion Net­work sin­gled Bar­clays out as the largest fi­nancier of fos­sil fu­els in europe and the sixth largest in the world. It showed that to­tal lend­ing and un­der­writ­ing to car­bon-in­ten­sive com­pa­nies and projects to­talled $85bn (£64bn) be­tween 2015 and 2018.

Bar­clays has also been crit­i­cised by groups in­clud­ing Shareac­tion and Green­peace over its cli­mate pol­icy, which they say does not go far enough to ad­dress the cri­sis.

While the bank said in Jan­uary last year it would stop fi­nanc­ing green­field min­ing and con­struc­tion or ex­pan­sion of coal-fired power sta­tions in all coun­tries, it still al­lows Bar­clays to bankroll com­pa­nies that are highly de­pen­dent on coal. It also stops short of rul­ing out back­ing con­tro­ver­sial tar sands projects and al­lows the bank to sup­port Arc­tic oil and gas projects.

The res­o­lu­tion comes ahead of the Bank of Eng­land’s first ever cli­mate stress tests, which will force the UK’S largest banks to re­port how ex­posed they are to the cli­mate cri­sis and how they would re­spond to tem­per­a­tures ris­ing by up to 4C. The bank has warned that dras­tic en­vi­ron­men­tal dam­age could hit fi­nan­cial in­sti­tu­tions by re­duc­ing as­set val­ues, low­er­ing prof­itabil­ity and rais­ing the cost of un­der­writ­ing in­surance losses.

Bar­clays is among the eight lenders ex­pected to go through the ex­er­cise. While the cen­tral bank will only re­lease ag­gre­gate re­sults to the pub­lic, it plans to use the first batch of re­ports to in­form how it su­per­vises each com­pany.

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.”

•Cranes op­er­at­ing at the con­struc­tion site of Monaco’s off­shore ex­ten­sion project in Monaco... on Thurs­day. Photo: AFP

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