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Update on Barclays’ ambition to be a net zero bank by 2050

30 November 2020

In March, we announced Barclays’ approach to tackling climate change…

  • Set an ambition to be a net zero bank by 2050
    • Across emissions from our own operations (Scope 1 and 2), which are already net zero, and the emissions of the clients we finance – so-called ‘financed emissions’
  • Committed to aligning all of our financing with the goals of the Paris Agreement, on the way to achieving our net zero ambition
    • Covering capital markets as well as lending, better reflecting the breadth of our support for clients through our investment bank
    • Across all sectors, starting with Energy and Power, which between them are responsible for up to three quarters of all emissions globally
  • We also committed to specific goals to help accelerate the transition to a low-carbon economy:
    • £100bn of green financing by 2030
      By the end of 2019 we’d already facilitated over £13bn of green financing, and our green financing in the first half of 2020 was nearly as much as for the whole of 2019
    • £175m investment in green innovation
      Our Sustainable Impact Capital Initiative will make £175m in principal investments over the next five years in the equity of innovative and environmentally-focused private companies
  • Continuing to develop our ESG disclosures, and the detailed information we provide in line with the guidelines of the Taskforce on Climate Related Financial Disclosures
  • Our approach received overwhelming shareholder support at our AGM in May

...over the last six months…

  • We have worked with leading industry and academic groups on common approaches to tackling the climate challenge, including:
  • To deliver on our commitment to align all of our financing to the Paris Agreement, including our capital markets activity, it was necessary to create a methodology that builds on and extends existing industry approaches
    • This better reflects the breadth of our support for clients through our investment bank, and we are the first bank to implement such an approach
  • BlueTrack™ is our methodology for measuring our financed emissions, and tracking them at a portfolio level against the goals of the Paris Agreement
    • It is helping us to embed climate impact in our financing decisions, so that we can make active choices to re-shape our portfolio
    • Full details of our methodology are available online; we believe that transparency and collaboration are key to achieving a common approach across the industry
  • We have used BlueTrack™ to assess the financed emissions of our Energy and Power portfolios, and set near-term and medium-term targets1:
    • Power portfolio emissions intensity will reduce by 30% by 2025, on the way to alignment with the IEA SDS benchmark by 2035
    • Energy portfolio absolute emissions will reduce by 15% by 2025, and continue to track the IEA SDS benchmark reduction on an ongoing basis
  • Our targets, and our progress towards them, can be tracked on our public climate dashboard, available at home.barclays/netzero
    • Our dashboard also shows the fuel mix of our portfolios, not just the overall ‘carbon limit’; this reflects our focus on transition, and shows specifically how we are accelerating the shift from higher-emissions to lower-emissions activity
  • It is difficult to compare approaches and targets used across the industry, given the lack of standardisation
    • We believe that our targets are stretching but achievable, and reflect not only the current size and composition of our Energy and Power portfolios, but also progress already made in their decarbonisation
    • This is another reason why we are working with our peers to build a common approach, so that different organisations can be more easily compared
  • To help our clients accelerate the transition to a low-carbon economy, we have created a new, multi-disciplinary Energy Banking team
    • Working with our clients to help them understand what the transition means for them, and then helping deliver the financing needed to achieve it
    • 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 to capture the commercial opportunities of transition
    • There may be companies or particular activities which cannot adjust to transition over time, and in such cases we believe that they will find it increasingly difficult to access the capital markets for financing, including through Barclays.
  • We have made our net zero ambition a key responsibility of a new role on Barclays’ Executive Committee, and appointed a Group Head of Climate Risk specifically to lead our work in this area.

…and over the coming years…

  • We will continue to engage with our peers, through established and emerging industry groups, to evolve our own approach and work towards standardisation across the industry
    • Our journey to becoming a net zero bank will require us to evolve and adapt our approach as part of the international financial services community
    • We hope that the thinking we have done to date, and in building our BlueTrack™ methodology, will serve as a meaningful contribution to the shared challenge of tackling climate change
  • We will enhance and refine our approach over time:
    • BlueTrack™ will ultimately extend to cover our entire financing portfolio, and we expect to include a couple of additional Industry & Manufacturing sub-sectors over the coming year
    • BlueTrack™ will be updated over time to track newer benchmark scenarios as they are developed
    • As company disclosures continue to improve, not least as a result of the TCFD guidelines, we are hopeful that this data will become sufficiently robust to play a much greater role in the calculation of BlueTrack™ metrics
  • Continuing to strengthen our capabilities to support our clients through the transition to a green economy, enhancing our Energy Banking team and accelerating progress towards our £100bn green financing target
  • Our annual ESG reporting will give a more detailed update:
    • Showing progress against targets
    • Including more information about how Barclays is supporting clients through their transition with green financing and capital markets solutions
    • Detailed disclosures, including under TCFD and other leading reporting frameworks

From a baseline of 12 months to 31 December 2020.  Final baseline data will be available early in 2021.  Indicative baseline data as at 30 June 2020: Power emissions intensity – 314 KgCO2/MWh; Energy absolute emissions – 80.4 MtCO2.  The metrics used in the BlueTrack™ methodology are an evolution of initial work conducted earlier in 2020.