Action: 

Our actions included:

• Identified the locations of operating sites for in scope Mining and Power clients, including the specifics of each client’s operational sites such as commodities mined, or power generation technology used.
• Mapped sites’ interface with nature by identifying sites’ overlap with biomes and sensitive locations aligned with the TNFD’s recommended Sensitive Location criteria¹: Protected Areas and Key Biodiversity Areas, areas of high ecosystem integrity, areas of rapid decline in ecosystem integrity, and areas of high physical water risk.

Results: Identified one third of in scope Mining clients' operational sites and around half of in scope Power clients' operational sites as overlapping with areas of high physical water risk², defined as areas of water scarcity and areas of poor water quality³. Additionally, less than 10% of Barclays’ Mining portfolio assets and Barclays Europe’s Power portfolio assets were identified as overlapping with Protected Areas or Key Biodiversity Areas. Whilst these metrics provide a useful starting point for understanding the overlap of in scope assets with Sensitive Locations, this indicates that these assets may have potential nature-related dependencies and impacts only, and when examined in isolation, should not be considered as a measure of these assets’ actual nature-related dependencies, impacts or risks.

Notes:

 ¹ In determining these Sensitive Locations, we used data from the WWF’s Risk Filter and applied thresholds for each of the categories using our professional judgement.

² For the Barclays Europe Power portfolio, almost all of our clients’ assets are located in areas across Europe assessed by the WWF Risk Filter as experiencing poor water quality. However, not all these operational sites will have a material impact or dependency on the local water ecosystem, particularly for wind and solar operating assets. Once these assets are descoped from the ‘high physical water risk’ calculation, the figure dropped to around half of in scope client sites.

³ This data is a variation of the TNFD’s recommended metric “exposure to companies with assets and/or activities in sensitive locations.”

Action: 

• Revisited our sector heatmap to identify potential material impacts and dependencies for the Mining and Power sectors.
• Considered the availability of data to measure these at a site level for our in-scope portfolio, using client reported data as well as publicly available and commercial third-party data.
• Evaluated the potential severity and likelihood of a selection of prioritised material nature impacts, such as land use change, water use, air and water pollution, occurring at sites located in Sensitive Locations, including an assessment of the sensitivity of the site to each impact, the potential magnitude of each site’s impact, and the likelihood that the impact is being appropriately mitigated by the company or host country. 

Results: Across both the Barclays Mining and Barclays Europe Power portfolios, land use change and water-related impacts emerged as areas of focus, resulting from, for example, the identification of sites with a large spatial footprint located in areas at risk of deforestation, or water intensive sites located in water stressed areas. 

Action:

• Assessed the likelihood and severity of financial risk associated with nature-related transition and physical risks.  We used scenario analysis⁴ techniques over various time horizons to assess the vulnerability and resilience of our mining and Barclays Europe portfolio. For the short-medium term stress scenario, key risk drivers were aligned with the Nature Exploratory Stress Test (NEST)⁵ that was conducted for Barclays Europe.
• Our preliminary assessment, using the short to medium-term stress scenario, examined the physical risks of droughts and flooding on the profitability of Barclays’ Mining and Barclays Europe’s Power clients, as well as the subsequent financial risks to Barclays that could arise.
• We also considered potential transition risks associated with a faster shift to a circular economy, water and pollution-related policies and increased legislation, and an expansion of Protected Area coverage, in line with the goals and targets of the Global Biodiversity Framework. 

Results: Our preliminary assessment, using the short to medium-term stress scenario, does not lead to a material deterioration of credit quality in Barclays Europe Power portfolio, which is driven by strong asset quality and lower relative transition risks. For the Mining portfolio, the scenario does have a more material impact on client profitability, but the impact on our overall portfolio credit quality is less material, owing to the strong credit quality of our portfolio and significant asset diversification. 

Notes:

⁴ The scenario design relied upon an internally-developed narrative, drawing on external sources, such as the UN IPR Nature and Climate integrated scenarios (https://www.unpri.org/inevitable-policy-response/ipr-forecast-policy-scenario--nature/10966.article)

⁵ More information on our approach to nature-related stress testing can be found in the ‘Scenario analysis’ section of our 2024 Annual Report. 

We are developing a set of recommendations to enhance our approach to managing nature-related impacts and risks, informed by the LEAP assessment findings. In 2025, we plan to build on our work undertaken in 2024 by conducting a pilot engagement exercise with a selection of in scope Mining and Power clients, to share insights and - where applicable - to explore their strategic and financing requirements, as well as undertaking a further sectoral LEAP assessment.

2018

• Published the World Heritage Sites and Ramsar Wetlands Statement

2019

• Published the Forestry and Palm Oil Statement

2020

• Launched a three-year partnership with the Blue Marine Foundation
• Published the Forestry and Agricultural Commodities Statement⁶ including new financing restrictions for the Soy sector
• Added restrictions for Arctic Oil and Gas to the Climate Change Statement

Notes:

⁶ Formerly known as Forestry and Palm Oil Statement.   

2021

• Joined the Taskforce on Nature-related Financial Disclosures (TNFD) Forum

2022

• Initiated pilot TNFD LEAP⁷ assessment, led by the United Nations Environment Programme – Finance Initiative (UNEP FI), of the UK and European Food and Agriculture portfolios

Notes:

⁷ Locate, Evaluate, Assess, Prepare.

2023

• Developed nature heatmap for key sectors
• Provided nature-related training to Barclays’ Board
• Disclosed credit exposures to nature priority sectors for the first time
• Updated the Forestry and Agricultural Commodities Statement, including through addition of financing restrictions for South American beef
• Co-led development of a Sustainable Markets Initiative (SMI) paper on 'Financing Coastal Nature-based Solutions'
• Engaged with the TNFD on Financial Services sector recommendations and guidance

2024

• Conducted TNFD LEAP assessments of the Barclays Mining and Barclays Europe Power portfolios
• Conducted a Nature Exploratory Stress Test for Barclays Europe
• Launched pilot nature questions in the Client Transition Framework (CTF) for the Power sector
• Updated the Climate Change Statement, including through addition of financing restrictions for the Amazon Biome and biomass enhanced due diligence requirements 
• Published policy paper ‘Cultivating a nature market that works for UK farmers’⁸
• Announced collaboration with the Environment Bank on biodiversity net gain
• Continued assessment of our real estate operations informed by the TNFD LEAP framework
• Delivered nature-related training to colleagues in Barclays Europe and the Barclays Bank Ireland PLC Board Risk Committee

Notes:

⁸ https://home.barclays/insights/2024/10/the-opportunity-of-biodiversity-net-gain/ 

2025

• Published the Protected Areas Statement⁹ to expand existing financing restrictions for project finance to include all Protected Areas and their buffer zones. 

Looking ahead

• TNFD LEAP assessment for an additional sector
• Targeted client engagement informed by the LEAP assessments
• Roll out of nature training to key colleagues
• Nature questions to be expanded across CTF evaluations
• Publish whitepaper on our approach to applying the LEAP framework 

Notes:

⁹ Formerly known as World Heritage Site and Ramsar Wetlands Statement.