On the go: Master trust Nest has joined a group of institutional investors urging Barclays to publish a plan to gradually phase out its financing of fossil fuel companies.
Pensions Expert reported in January that 11 institutional investors managing more than £130bn – including Brunel Pension Partnership, LGPS Central, Falkirk Council Pension Fund and Merseyside Pension Fund – filed a shareholder resolution at Barclays alongside more than 100 individual shareholders, led by responsible investment charity ShareAction.
The resolution, which will be voted on at the bank’s annual meeting in May 2020, requests that Barclays publishes a plan to gradually stop the provision of financial services – including project finance, corporate finance, and underwriting – to companies in the energy sector, and to gas and electric utilities that are not aligned with the goals of the Paris climate agreement.
According to Diandra Soobiah, Nest’s head of responsible investment, the risk from climate change is very real.
“Allowing the fossil fuel industry to thrive unabated will not only increase the likelihood of catastrophic environmental damage but could severely impact the asset values and profitability of financial institutions.
“We’ve already seen strong action from major banks around the world, many of which have ceased doing business with companies whose main business activity is the exploration, production and export of fossil fuels.”
Nest is strongly encouraging Barclays’ board to “show leadership on this critical issue and present a clear and robust plan on how they’ll phase out all financial services to companies that are not working to support the Paris Agreement”.
In response, a Barclays spokesperson said: “We continue to engage with ShareAction and other shareholders on this issue, and we will make a further statement at the appropriate time.”
According to Banking on Climate Change 2019, a report published in March by Rainforest Action Network, Barclays is the world’s sixth largest backer of fossil fuels.
Since the Paris Agreement was signed in 2015, Barclays has provided more than $85bn (£65bn) of finance to fossil fuel companies and high-carbon projects such as tar sands and Arctic oil and gas. This constitutes the highest level of fossil fuel financing of any European bank, exceeding its peers by more than $27bn, ShareAction noted.
