During last Barclays AGM, Nigel Higgins Group Chairman of Barclays PLC expressed how over the last year, the Board has spent significant time looking at Barclays’ purpose, and how the organisation can make a real difference to society, not least in the preservation of our environment.

Barclays tackling climate change

“Barclays can, and should, play a leading role in tackling climate change.

The size and scale of our business means that we can help accelerate the transition to a low-carbon economy. It is clear, however, that we are behind where we would like to be. Resolution 29 sets a powerful ambition for Barclays to be net zero by 2050 and commits the Group to a strategy, with targets, for alignment of its entire financing portfolio to the goals of the Paris Agreement.”

Nigel Higgins Group Chairman of Barclays PLC

With those words, Nigel Higgins Group Chairman of Barclays PLC introduced the virtual Barclays AGM to shareholders.

The main challenge of the AGM was the confrontation of two resolutions about climate change, the #29 recommended by Barclays, to promote the long-term success of the Company, given the risks and opportunities associated with climate change, the Company and the Directors be authorized and directed by the shareholders to:

1. Set an ambition to be a net zero bank in Scopes 1, 2 and 3 by 2050, in line with the objectives of the Paris Agreement.

2. Set, disclose and implement a strategy, with targets, to transition its provision of financial services (particularly its financing activities, including project finance, corporate finance and underwriting) across all sectors (starting with, but not limited to, the energy and power sectors) to align with the goals and timelines of the Paris Agreement.

3. Report annually on progress under that strategy, starting from 2021, including a summary of the framework, methodology, timescales and core assumptions used, omitting commercially confidential or competitively sensitive information, and at reasonable cost.

And the recommendation #30 raised by ShareAction, to promote the long-term success of the Company, given the risks and opportunities associated with climate change, shareholders direct the Company to set and disclose targets to phase out the provision of financial services, including but not limited to project finance, corporate finance, and underwriting, to the energy sector (as defined by the Global Industry Classification Standard(1)) and electric and gas utility companies that are not aligned with Articles 2.1(a)(2) and 4.1(3) of the Paris Agreement (‘the Paris goals’).

The timelines for phase out must be aligned with the Paris goals. The Company should report on progress on an annual basis, starting from 2021 onwards. Disclosure and reporting should be done at reasonable cost and omit proprietary information.

Barclays tackling climate change

Barclays Group Chairman acknowledge that the company is pleased that after considerable and constructive dialogue, ShareAction and many of the co-filers of resolution #30 recommend shareholders to vote for both resolution #29 and resolution #30. The Board does not, however, support the ShareAction resolution (resolution 30).

“The primary reasons for this are that any special resolution adopted at the AGM binds the Board and the Company to give effect to the matters set out in the resolution – in effect as if it had the force of law – and it therefore needs to be understandable, practical and deliverable. The Board is concerned that the ShareAction resolution does not pass this test. In addition, the ShareAction resolution does not, in our opinion, pay sufficient attention to the importance of energy transition, and nor does it encompass the “net zero by 2050” ambition, which is a key feature of the Board’s resolution and the leading role that Barclays wishes to play in tackling climate change.”

Nigel Higgins Group Chairman of Barclays PLC

Barclays tackling climate change

During the Barclays’ AGM, nearly 24% of shareholders voted for ShareAction’s resolution asking the bank to phase out financing for fossil fuels and utility companies that are not aligned with the Paris climate goals. Passing the 20% threshold means the bank will have to formally respond to its shareholders.

ShareAction calculates that, including abstentions, almost 34% of shareholders who voted on Resolution #30 did not follow the bank’s formal recommendation not to support the shareholder-led resolution.

The board’s own resolution on its net-zero ambition, filed in response to intensive investor engagement triggered by ShareAction’s resolution, received 99.93% support.

Blackrock, one of Barclays’ top 3 shareholders, voted against the shareholder-led resolution. The asset manager could be facing conflicts of interest as it has been selected by Barclays to advise the bank on its climate change strategy.

Barclays tackling climate change

“Today’s vote on both the climate resolutions sends an unequivocal signal not just to the board of Barclays but to the entire global banking sector that all banks must start to phase out fossil fuel financing. The climate emergency requires nothing less. There is huge support in society at large and in the investment community for firm action on climate change by the world’s major banks. While we welcome and applaud Barclays for setting a net zero by 2050 ambition, shareholders have today made clear that they expect that statement of ambition to be backed up by clear phase-out targets when it comes to energy and power sector activity that is not aligned with the Paris Agreement.

“Today’s voting results will send shockwaves through the banking industry. While Barclays is Europe’s largest fossil fuel financier, it is far from being the only bank to prop up companies that are driving the climate crisis.  We recently published evidence that no European bank is yet doing what’s needed to meet the Paris climate goals.

“It also shows an increasing disconnect between investors’ expectations of banks on climate change and those of Glass Lewis and ISS, the two largest proxy advisors.”

Catherine Howarth, Chief Executive of ShareAction

Barclays tackling climate change

(1) The Global Industry Classification Standard defines the energy sector as the energy equipment and services industry, namely oil and gas drilling and oil and gas equipment services companies, and the oil and gas and consumable fuels industry, namely integrated oil and gas, oil and gas exploration and production, oil and gas refining and marketing, oil and gas storage and transportation, and coal and consumable fuels companies.

Article 2.1(a) of The Paris Agreement states the goal of “Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.”

Article 4.1 of The Paris Agreement: In order to achieve the long-term temperature goal set out in Article 2, Parties aim to reach global peaking of greenhouse gas emissions as soon as possible, recognizing that peaking will take longer for developing country Parties, and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, on the basis of equity, and in the context of sustainable development and efforts to eradicate poverty.

Barclays Group

Barclays tackling climate change

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