Barclays is facing calls to close a “loophole” in its energy policy which campaigners says will permit the financing of fracking firms.
The banking giant amended its energy policy in February, following negotiations with campaigning group ShareAction and Barclays shareholders. It promised it would no longer directly finance new oil and gas projects and would restrict its financing of ‘pureplay’ companies that focus exclusively on fossil fuel extraction and exploration.
However, ShareAction has highlighted that pureplay companies working on short-term extraction projects – such as fracking – are exempted from this commitment.
The campaign group scrutinised Barclays’ financing of oil and gas companies to assess the impact of its new restrictions and found they are unlikely to meaningfully address the bank’s role as “Europe’s largest financier of fracking”.
It found that a third (34%) of Barclays’ financing to upstream oil and gas companies for the eight year period from 2016-2022 went to pureplay fossil fuel extraction and/or exploration companies.
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While the annual volume of Barclays’ financing to pureplay companies has typically declined since 2016, analysis shows that that most of this financing – on average 57% – goes to companies specialising in fracking. This rose to 80% in 2022, the latest year for which figures are available.
Kelly Shields, campaign manager at ShareAction, said: “Barclays’ energy policy contains loopholes that allow the bank to continue to financially support fracking – a risky activity that contributes to climate change and can destroy habitats and contaminate water supplies.
“[The bank’s] stance on fracking leaves it out of step with other large banks that have listened to the concerns of investors and customers and started taking steps to cut off support for this fossil fuel.
“We’re calling on Barclays’ shareholders to ask the bank to close these loopholes and rule out financing for all pureplay oil and gas companies, including fracking clients, wherever they are in the world.”
Barclays also committed to restrict financing for fracking in the UK and Europe. However, ShareAction pointed out fracking is mostly banned or suspended in these regions, while the bank’s fracking client base is largely located in the US.
A Barclays spokesperson told the Independent it was “committed to financing current energy needs, while financing the scaling of the clean energy system of tomorrow, to ensure that energy is secure, affordable and reliable”.
“With a target to provide one trillion dollars of Sustainable and Transition Finance by 2030, Barclays continues to support an energy sector in transition, focusing on the diversified energy companies investing in low-carbon and with greater scrutiny on those engaged in developing new oil and gas projects,” they continued.
Barclays said its absolute financed emissions for the energy sector had reduced by 44% since 2020, exceeding its 2030 target.
