Supporting green financing and innovation
As well as our ambition to be net zero by 2050, we are also playing our part in making the financial system greener: directing flows of private finance into the products, projects and businesses that are accelerating the transition to a low-carbon future.
That means we’re actively seeking to increase the proportion of green financing in our portfolio, investing in the innovations that are helping to accelerate the transition, and building the retail products and services that will help our millions of customers to enjoy greener banking.
We are increasingly asked by clients to help them navigate the world of green financing, and so we have invested in our capabilities by building dedicated teams and expertise that focus on green and sustainable markets and products.
£100bn target for green financing
Green financing supports the transition to a low-carbon future by providing financing that is specifically focused on green activity, including renewables, energy efficiency and sustainable transport. This includes specific products such as Green Loans, Green Project Finance, and Green Bonds.
We increased our green financing by around 45% last year, to a total of £7.8bn. But we believe that we can help to grow the sector further and faster by setting a new target for the amount of green financing we provide: £100bn by 2030.
Most of our green financing is managed through our Investment Bank, but we’re also building on our leading product range for Corporate Banking clients, including green trade loans, green innovation loans, and green asset finance.
We expect the proportion of green financing in our portfolio to increase significantly over time.
£175m investment in green innovation
We’re proud to be launching our Sustainable Impact Capital Initiative, to 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 big green ideas into reality.
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 – and we hope that some of the companies we invest in may just go on to change the world.
Dedicated Sustainable and Impact Banking team
We are also re-shaping our business to support our clients in navigating the growing focus on sustainability and social impact by investors and corporations.
We’ve created a dedicated Sustainable and Impact Banking coverage group, which will serve as a global, centralised team focused on identifying new high-growth clients that are solving environmental or social challenges, and advising our existing clients on sustainable finance.
With an estimated $30 trillion of assets under management globally dedicated to ESG investing, it’s a significant and rapidly growing section of the market. Mission-focused companies are continually emerging in every sector to address the world’s most pressing challenges, and leading global companies are both integrating sustainability into their corporate strategies and looking to partner with innovative, start-up firms.
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.