Financing the transition
The transition to a low-carbon economy is today’s defining opportunity for innovation and growth. The scale of the investment needed is vast, estimated to be between $3-5trn per year over the next 30 years. There is a significant opportunity for Barclays to play a leading role in helping to meet this demand for climate change related financing and to support the transition.
We are providing the green and sustainable finance required to transform the economies we serve. This includes supporting customers and clients to make their own transitions, as well as directing investment, including our own capital, into new green technologies and infrastructure projects that will build up low-carbon capacity and capability.
£100bn green financing
Green financing supports the transition by facilitating financing including: labelled, 'use of proceeds' and business mix financing in environmental categories and sustainability-linked financing that incorporates environmental performance targets.
Barclays is committed to facilitating £100bn of green financing between 2018 and 2030.
Since 2018 we’ve already facilitated £62.2bn of green financing, and we continue to see increased demand for more products such as sustainability-linked loans and bonds.
£175m investment in green innovation
Our Sustainable Impact Capital Programme has a mandate to invest up to £175m of equity capital in sustainability-focused start-ups between 2020 and 2025, helping to accelerate our clients’ transition towards a low-carbon economy.
From the acceleration of innovative carbon-efficient technologies and supply chains to supporting the development of viable markets for carbon capture and sequestration, the Programme is seeking out and supporting clear, scalable propositions that deliver both environmental benefits and economic returns.
Through the Programme, we aim to fill growth stage funding gaps to help accelerate and scale catalytic and strategic solutions to environmental challenges.
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 2021, Barclays was a founding member of the Net-Zero Banking Alliance, part of the Glasgow Financial Alliance for Net Zero.
- Barclays has signed the statement of support of the Financial Stability Board’ s (FSB) TCFD and has aligned its disclosures since 2017.
- 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.
- Barclays is a member of the Partnership for Carbon Accounting Financials (PCAF), supporting the development of the Global Carbon Accounting Standard. In 2021, Barclays co-Chaired a Capital Markets Working Group of six global banks that are developing a methodology to account for the emissions associated with the activity that banks undertake to facilitate capital markets transactions. [INSERT LINK]
- Barclays is a member of 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
- Barclays takes part in the UNEP FI Principles for Responsible Banking client engagement working group, which is developing practical tools for industry-specific client engagement on transition.
- Barclays co-chaired a Net Zero Working Group of HRH The Prince of Wales’ Sustainable Markets Initiative’s Financial Services Taskforce, which published a Net Zero Practitioner’s Guide for banks.
Working with customers and clients
In January 2022 the Group CEO created a Climate & Sustainable Finance Council, designed to help identify, accelerate and promote the development of Barclays’ climate and sustainable finance growth opportunities. This includes opportunities for our customers and clients across all our businesses, products and services, as well as opportunities that could have a material financial impact on Barclays. It is chaired by the Group CEO and comprised of senior stakeholders from across the business.
The council will support our multi-disciplinary group of bankers to deploy these solutions and capture these opportunities. This integrated approach brings together a number of teams across the organisation, including:
- Sustainable Capital Markets
- Sustainable Impact Banking (SIB)
- Corporate Bank Sustainable Product Group
- Responsible investing
- Retail Banking
- Treasury Green Activities
- Sustainable Impact Capital
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.