Institutional investors file resolution for AGM of bank to phase out loans to fossil fuel projects or companies

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.

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 (BPP) – 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% 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.

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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.”

The 11 institutional investors backing ShareAction