Accelerating the transition
We see significant opportunity in the transition to a low-carbon economy: to strengthen relationships with our clients as we help them to adapt; to build new relationships with innovative, fast-growth organisations that are developing new green technology; and to work in partnership with academics and industry associations to shape the latest thinking and learn from the experience of others.
Barclays has a long history of green financing, having worked on some of the industry’s most significant renewables deals since one of the first in 2009, so we’re well placed to continue enabling the sort of high-impact investments that will make the most difference.
Our Energy Banking team
Our Energy Banking team is multi-disciplinary group that is helping clients accelerate the transition to a low-carbon economy, and ensuring that we capture the commercial opportunities that transition will create.
The team brings together our existing Power and Utilities, Natural Resources, and Sustainable and Impact Banking groups. This integrated approach will enable our support for clients to better reflect the interrelated changes currently underway across the energy industry, and extends our long-standing leadership in the sector.
We can only achieve our net zero ambition in partnership with our clients. Our new Energy Banking team will strengthen and extend those relationships, as we play our part in helping to provide the trillions of dollars in financing required for the world to make the transition to net zero.
£100bn target for green financing
The investment required for the world to meet the goals of the Paris Agreement is estimated to be between $1.6 - $3.8tn annually until 2050. Matching the investment needed is fundamental to the support we’re providing to clients as they accelerate their transition to a low-carbon economy.
Green financing supports the transition by providing financing that is specifically focused on green activity, including for renewables, energy efficiency and sustainable transport. This includes specific products such as Green Loans, Green Project Finance, and Green Bonds.
Since 2018 we’ve already facilitated over £13bn of green financing, and there is increasing demand for more innovative products, such as Sustainability Linked Loans and Bonds.
There is also potential for growth in areas such as securitisation, as households borrow to finance solar panels, electric vehicles and making homes more energy efficient.
£175m investment in green innovation
Our Sustainable Impact Capital Initiative will invest £175m over the next five years in the equity of innovative and environmentally-focused private companies.
These will be principal investments made by Barclays, which we hope will provide environmental entrepreneurs with additional support to turn their green ideas into reality, such as through the acceleration of innovative carbon-efficient technologies and supply-chains, and supporting the development of viable markets for carbon capture and sequestration.
Many of the scientific models used in tackling climate change assume that the world will have access to some level of net negative emissions technologies at scale. Some of these technologies exist today, but getting to net zero even faster will require new ideas.
Working in partnership across the industry
We’re already working with leading academic and industry associations on the best way to engage clients on their transition, and to help shape the industry’s thinking. These include:
- In September 2019, Barclays joined 16 other banks in piloting the Paris Agreement Capital Transition Assessment (PACTA) – a leading tool developed by the 2˚ Investing Initiative.
- The Partnership for Carbon Accounting Financials (PCAF), supporting the development of the Global Carbon Accounting Standard.
- The Financing a Just Transition Alliance, led by the Grantham Research Institute at LSE, which looks at how the financial services industry can facilitate and support just transition activities
- UNEP FI Principles for Responsible Banking client engagement working group, which is developing practical tools for industry-specific client engagement on transition.
Making retail banking greener
Barclays was the first mainstream UK bank to launch a ‘green mortgage’ in 2018, and we’re continuing to expand our proposition.
The Barclays Green Home Mortgage offers homebuyers lower interest rates for new-build properties meeting minimum energy efficiency requirements. In 2019, we extended coverage to a further nine major homebuilders, who between them build more than half of all new-build residential properties in the UK.
Our small business customers can take advantage of a green loan, to help fund green energy and sustainable projects.
We’re also actively engaging with our retail customers to understand what they want from green products, and how we can help them make their banking greener.
Green thought-leadership from Research
In the 15 years since ‘environmental, social and governance’ was coined as a term by the UN Global Compact, ESG investment has grown from a niche position to one that influences tens of trillions of dollars in assets under management.
As organisations and investors seek to understand the climate challenge and how they should respond, our Research teams are providing the expertise and insights to help navigate the green transition.
From global thematic trends that could shape the future business environment, to analysing where companies sit on the spectrum of ESG performance, our research is helping clients to ‘solve sustainable’.
Our ESG white paper explains how ESG investing has grown in recent years, and how Barclays is responding.
Working with our suppliers
Since 2016, we have been working with Carbon Disclosure Project to calculate supply chain emissions from our top 125 suppliers.
Our Supplier Code of Conduct has a specific focus on environmental management requirements, which includes establishing operational practices that minimise impact on the environment, and deploying measures to prevent and reduce environmental harm.
Through the code of conduct, we also expect suppliers to track performance and report environmental improvements, as well as setting environmental targets and commitments.
We ask suppliers to align to our strategic goals and set emissions reductions targets that are long term, embrace the Science Based Target methodology and support the transition to a low-carbon economy.
A greener pension for Barclays employees
Our 210,000-member UK Retirement Fund was the first UK Bank Pension Fund to sign up to the Principles for Responsible Investment (PRI) in 2015, and has PRI assessment scores of “A” on Strategy and “A+” on Manager Selection. It’s also a Tier 1 signatory to the UK Stewardship Code.
Climate change is the subject of specific risk management and measurement as part of the fund’s responsible investment approach. In 2020, the fund signed up to the Institutional Investors Group on Climate Change (IIGCC) - the European membership body for investor collaboration on climate change, and the voice of investors taking action for a prosperous, low-carbon future.