Addressing climate change

For a just and orderly transition, global energy demand needs to be met while renewable energy is scaled. The scale of our business gives us the opportunity to help finance the energy transition – to use our global reach, products, expertise and position in the global economy to work with our clients, including those in the Energy sector, as they transition to a low-carbon business model.

We are committed to continuing the work we began in 2020 to meet our ambition to be a net zero bank by 2050. We have a clear strategy to meet that ambition: by achieving net zero operations, reducing our financed emissions and financing the transition.

We continue to implement our climate strategy by:

• Strengthening our policies on fossil fuel financing;
• Setting science-based Paris-aligned emission reduction targets for the highest emitting sectors that we finance, including Energy and Power;
• A mandate to invest up to £500million of our own capital through Barclays Sustainable Impact Capital into climate tech companies by the end of 2027; and
• Mobilising $1trillion of financing by the end of 2030 to help finance the transition.

Our approach to financing the energy sector

Fossil fuels are still required for many essential activities – including electricity generation, transport and heating. In the International Energy Agency NZE scenario, new long lead time upstream oil and gas projects are not required on a 1.5°C-aligned pathway. For current and future (declining) global demand to be satisfied, investment is needed to support existing assets, while clean energy is scaled¹.

Our financed emissions for the energy sector have dropped by 44% between 2020 and 2023, exceeding our target of a 15% reduction by 2025.

A report by BloombergNEF found that, based on their data and methodology, in 2022 Barclays facilitated $1.55 of finance for low-carbon energy for every $1 of finance for fossil fuel energy².

Barclays will continue 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.

However, from 2024 we will no longer provide project finance, or other direct finance to energy companies, for new upstream oil and gas projects or related infrastructure. We will not provide financing to new energy clients where more than 10% of their total planned oil and gas capital expenditure is in expansion³.

How is Barclays helping to finance the energy transition?

Reaching net zero means finding low-carbon ways of doing necessary activities – including electricity generation, transport and heating.

To reduce reliance on oil and gas, the world needs to accelerate and scale the supply and capacity of renewables and low-carbon climate tech solutions. The Climate Policy Initiative estimates that this requires at least $4.3 trillion of climate finance a year by 2030⁴.

Barclays is committed to help finance the energy transition and to help do this, we set a target to facilitate $1trillion of Sustainable and Transition Financing between 2023 and the end of 2030.

$123.8bn of Sustainable and Transition Financing has been mobilised as at H1 2024.

We are also focused on investing and scaling the climate tech – hydrogen, carbon capture, batteries, amongst others - needed by society and our clients to transition, generate economic growth and create a new wave of green jobs.

We have a mandate to invest up to £500m of Barclays’ own capital by the end of 2027 in climate tech companies and we have invested £166m in over 20 innovative companies as at H1 2024.

How is Barclays engaging with clients on their transition and decarbonisation strategies?

Engaging with clients on their transition and decarbonisation efforts is at the core of our approach.

Clients’ transition plans and decarbonisation strategies will continue to be evaluated using our Client Transition Framework, assessing for alignment with our financed emissions targets.

From 2025, energy clients will be expected to have in place a transition plan or decarbonisation strategy. Clients’ transition plans and decarbonisation strategies will continue to be evaluated using our Client Transition Framework which supports our evaluation of our clients’ current and expected future progress as they transition to a low carbon business model³.

From January 2026, to access financing, energy clients will be required to have 2030 methane emissions reduction targets, a commitment to end all routine/non-essential venting and flaring by 2030, and near-term net-zero aligned Scope 1 and 2 emissions reduction targets³.

The energy clients unable or unwilling to reduce their emissions or play a role in the energy transition may find it increasingly difficult to access financing from Barclays.

How has Barclays engaged with stakeholders on its energy position?

Changes to our Climate Change Statement are informed by engagement with our stakeholders, including shareholders, clients, climate experts and civil society groups. Our climate strategy is overseen by the Barclays Board, and continues to evolve, taking into account market, technological, regulatory and geopolitical developments, as well as all relevant risks we face as a result of climate change, including financial, credit and market risk.

As our climate strategy continues to evolve in light of the external environment in which Barclays operates, we are committed to continue to engage with our stakeholders. The Group Sustainability Committee will review the Climate Change Statement annually and where appropriate recommend any material updates to the Board Sustainability Committee.

ShareAction and a co-filing group of investors filed a resolution in December 2023 in relation to Barclays’ climate strategy. Following extensive engagement with Barclays’ senior leadership, ShareAction and the co-filing group of investors have withdrawn the resolution, recognising Barclays’ ongoing work in progressing its climate strategy and commitment to continuing engagement, including an annual meeting for the co-filing group with the Barclays Group CEO. 

Further information on the progress of our climate strategy is available in our 2023 Annual Report. 

¹ International Energy Agency – Net Zero Roadmap, 2023 Update

² Bloomberg New Energy Finance – Financing the Transition: Energy Supply Investment and Bank-Facilitated Financing Ratios.         

³ For further details on the exact scope and application of these restrictions, please see our Climate Change Statement (PDF 1MB).

⁴ Climate Policy Initiative – Global Landscape of Climate Finance: A Decade of Data

1 Barclays 2022 Annual Report