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Published on January 16th, 2019 | by Joshua S Hill

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Barclays “On Wrong Side Of History” In New Climate Change Policy

January 16th, 2019 by  


British banking giant Barclays has revised its stance on investing in fossil fuels which includes halting investment in coal mining and coal-fired power stations, but the bank has come under fire for not going far enough, with environmental organization Greenpeace comparing its lack of action with the bank’s previous stance on apartheid, saying the bank is “once again on the wrong side of history.”

While the global fossil fuel divestment movement has focused primarily on investors taking their money elsewhere, it has nevertheless had a tremendous impact throughout the world of financial institutions, with banks around the world revising their policies regarding what they will and will not continue to invest in and support.

In the past two years a slew of banking giants from around the world have revised their policies on investing in fossil fuel sources, including such names as Deutsche Bank in January 2017, BNP Paribas in October 2017, the World Bank, ING, and AXA in December 2017, the National Australia Bank also in December 2017, HSBC in April 2018, Swiss Re in July 2018, and Lloyds Banking Group in August 2018.

Unfortunately, not every revision is of the same level of ambition, with some banks deciding to go much further than others. BNP Paribas in October 2017 announced its decision to cease all investment in “pipelines that primarily carry oil and gas from shale and/or oil from tar sands” and severed “business relations with companies that derive the majority of their revenue from these activities.” Other banks, however, have taken less strict stances, restricting investment only to coal mining or coal-fired power stations, or based on the percentage of income that comes from fossil fuel sources.

Announced on January 14, Barclays framed its decision to revise its energy and climate change policy under the rubric that banks “have an important role to play in ensuring that the world’s energy needs are met while helping to limit the threat that climate change poses to people and to the natural environment.” The bank made note of both the need for banks to fall in line with the Paris Climate Agreement and to take note of the Intergovernmental Panel on Climate Change (IPCC) warnings around limiting global temperature increase to “2°C above pre-industrial levels, and make efforts to limit increases to 1.5°C, which would cause lower impacts and risks.”

Unfortunately, very little of Barclays’ revised policy bears out its concerns. Barclays declared “no appetite” to support project finance for either greenfield thermal coal mines anywhere in the world or the construction or material expansion of coal-fired power stations anywhere in the world. However, at the same time, the bank declared that it “will review clients active in the thermal coal mining and coal-fired power sector, and specific transactions related to these sectors, on a case-by-case basis” and that “certain countries’ energy and growth needs will continue to require thermal coal over this period, and that thermal coal will continue to represent a component of the overall energy mix for the medium term.”

Barclays will similarly not completely cease financing companies involved in Mountain Top Removal (MTR) or exploration and/or extraction from the Arctic — though the company will apply Enhanced Due Diligence (EDD) on both. Further, the bank will only reduce its credit exposure to companies that derive over 50% of their power generation mix from coal-fired power in their energy mix — a much higher threshold than that set by other banks; as comparison, Dutch multinational bank ING lowered its cutoff to companies that derive over 5%.

Most notably is the bank’s policy on oil sands, which will likely not be entirely ruled out, but rather, “Any transaction in which the use of proceeds is for the exploration, extraction, transportation (including the construction of pipelines to carry oil sands), or processing of oil sands, is subject to EDD.”

Unsurprisingly, given the almost universal toothlessness of Barclays new policy, condemnation was swift and wide-ranging.

“Barclays, Standard Chartered, RBS, and Lloyds have all ruled out this form of financing,” said Ashley Taylor, Christian Aid’s senior private sector advisor, who attempted to look for the bright side. “Coal is the dirtiest fossil fuel and needs to be phased out of the global energy system urgently if we’re going to stop the impacts of climate change from getting worse. The report in October last year, by the Intergovernmental Panel on Climate Change made that clear.”

“Although Barclays will stop coal project financing they will continue to fund coal companies and financing highly polluting tar sands oil,” Taylor added. “Clearly they still have a long way to go.”

Less politic and more to the point was Greenpeace UK oil campaigner Hannah Martin, who likened Barclays’ continued adherence to relative business-as-usual policies to the bank’s checkered history of supporting apartheid.

“As it was with apartheid, so it is with climate change,” said Hannah Martin.

“Barclays is on the wrong side of history. By continuing to fund tar sands pipelines, Barclays is once again choosing short-term profit over human rights and the wishes of a small number of corporate clients over those of tens of thousands of its customers.

“It shows either staggering ignorance or reckless disregard that Barclays has taken so long to deliver so little on climate change. Its dismal failure to keep pace with other major banks in dumping toxic tar sands pipelines, together with its inadequate position on coal, is the clearest indication yet that Barclays simply doesn’t get it when it comes to the risks the bank and the planet face from climate change.

“In failing to exclude all financing to tar sands pipelines, and companies that continue to develop a significant number of coal plans around the world, Barclays’ make a mockery of their claims to take climate change seriously. The pressure on them will only increase.” – Martin

 
 
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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



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