Managing environmental and social impacts
We believe that appropriate management of environmental and social impacts is not only the right thing to do, but ensures the longevity of our business and our ability to serve our clients.
The scale and scope of the support we provide to our customers and clients means that we can have a significant impact on the world around us.
Our approach to climate change
Climate change is undoubtedly one of the greatest challenges and one of the most complex issues faced by the world today, given its proven impacts on the global economy, physical environment, habitats and human populations, but also its inherent ethical, social, political, and justice considerations. Barclays can, and should, play a leading role in tackling climate change. The size and scale of our business means that we can make a real difference in helping to accelerate the transition to a low-carbon economy.
Environmental and social transaction risk management
The scale and scope of the support we provide to our customers and clients means that we can have a significant impact on the world around us. The bank’s potential adverse environmental and social impacts are frequently indirect, arising from the provision of financial services to business customers operating in sensitive sectors. We believe that appropriate risk management of these environmental and social impacts is not only the right thing to do, but ensures the longevity of our business and our ability to serve our clients.
Environmental and social risks are governed and managed as part of Barclays’ credit risk and reputation risk management frameworks and processes. This includes the client transaction review process, which is managed by a dedicated Environmental Risk Management team, as part of the central Credit Risk Management function, as well as the Group Sustainability and Reputation risk teams. Our approach to environmental and social risk management is based on a combination of statements, standards and guidance. The position statements are developed in consultation with external stakeholders and aligned with industry best practices, such as the International Finance Corporation (IFC) Performance Standards.
Deforestation and soft commodities
The forestry and agribusiness industries are responsible for producing a range of soft commodities such as pulp and paper, palm oil and soy that play a critical role in feeding the world’s population and driving economic development. The production and processing of these commodities is also a major source of income and supports the livelihoods of millions of people across the world, particularly in developing economies.
However, these activities are also associated with a range of adverse environmental and social impacts, including loss of biodiversity, damage to precious ecosystems, labour exploitation and displacement of local communities. Deforestation, and forest and peatland degradation are also a significant challenge in many regions and a major contributor to climate change, accounting for up to 15% of global greenhouse gas emissions, and second only to the energy sector.
Barclays has therefore developed a specific approach to the forestry and agribusiness sectors which is outlined in this statement. We seek to support clients that promote sustainable land management practices whilst respecting the rights of workers and local communities.
Barclays is a signatory to the New York Forest Declaration of the United Nations and its objective of supporting all endeavours to cut natural forest loss in half by 2020, and to end it by 2030. Barclays has also adopted the Banking Environment Initiative’s Soft Commodities Compact, which commits us to helping our corporate clients in a number of soft commodity sectors achieve zero net deforestation by 2020.
At Barclays, we operate in accordance with the International Bill of Human Rights, and take account of other internationally accepted human rights standards, including the UN Guiding Principles on Business and Human Rights. We respect and promote human rights through our employment policies and practices, through our supply chain screening and engagement and through the responsible provision of our products and services.
With nearly 14,000 companies from more than 26 countries supplying us, our supply chain helps our businesses deliver for all our customers, clients and colleagues. Our supply base is diverse across scale and ownership type and structure, including start-ups, small and medium-sized businesses, businesses owned, controlled and operated by under-represented segments of local societies as well as multinational corporations.
Our 2020 ESG Report
Barclays recognises that the focus on the societal impact of businesses and performance on wider Environmental, Social and Governance (ESG) factors has increased in recent years, with growing interest from a range of stakeholders including investors, clients, policy makers and regulators.