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Reducing our financed emissions

Most of our emissions result from the activities of the clients that we finance and those generated in their respective value chains. These are our so-called ‘financed emissions’.

We are committed to align all our financing to the goals and timelines of the Paris Agreement. In order to meet this ambition, we need to reduce our financed emissions, not just for lending but for capital markets activities as well.

In November 2020, we set targets, informed by Paris-aligned benchmark scenarios, to reduce our financed emissions. We prioritised the Energy and Power sectors because they are responsible for up to three-quarters of all Greenhouse Gas (GHG) emissions globally and because Barclays has meaningful exposure to them.

This year, we went further, and have now set 2030 reduction targets across four of the highest-emitting sectors in our portfolio: Energy, Power, Cement and Steel.

We plan to continue our work to set targets to reduce our financed emissions. We aim to set targets for material high-emitting sectors in our portfolio by 2024, consistent with our commitments as a founding member of the Net-Zero Banking Alliance. We have already started work to set targets for two additional sectors: Automotive Manufacturing and Residential Real Estate.

Bluetrack

Our approach to setting targets to reduce our financed emissions is underpinned by BlueTrack™, a methodology we have developed for measuring our financed emissions and tracking them at a portfolio level against the goals of the Paris Agreement. BlueTrack™ builds on and extends existing industry approaches to cover not only lending but also capital markets financing. This better reflects the breadth of our support for clients through our investment bank. Read more about BlueTrack™.

Working with our clients

We believe that Barclays can make the greatest difference by supporting our clients to transition to a low-carbon economy, rather than by simply phasing out support for them. This is particularly true for our clients in highly carbon-intensive sectors.

Exiting companies at this stage could push them to less transparent sources of funding, and to sources that may be significantly less supportive of the transition. Many highly carbon-intensive sectors require finance to transition, including Power, Energy, Cement, Steel, Transport and Materials. Restricting the flow of capital to these sectors could be harmful to the pace of the transition, limiting the real terms impact on global warming.

Our priority is, therefore, to support our customers and clients to transition. Consistent with our Purpose, our climate strategy and our approach to risk management, and to ensure that we achieve our ambition to be a net zero bank by 2050, where companies are unable or unwilling to reduce or eliminate their emissions, we will reduce our support over time. Such companies will find it increasingly difficult to access financing, including through Barclays. For example, since 2020 we have declined to provide financing to clients that have been unable to meet our existing policies in relation to thermal coal and oil sands.

The trajectory for our clients’ transition is influenced by a number of factors, including technological advancement, the public policy environment, behavioural change in society and the scale of change needed to adapt their business models. Client transition pathways will vary, even within the same sectors and geographies. We are developing a client transition framework to enable us to measure and monitor our clients’ progress and seek opportunities to accelerate their progress through the provision of advice and financing solutions. This high-level framework, together with sector-based transition pathways, will allow us to more clearly understand how our clients’ activities align with Barclays’ net zero ambition and to identify and support their financing needs.

Restrictive policies

In addition to setting sector-specific emission-reduction targets, we have set explicit restrictions to curtail or prohibit financing of certain activities and in sensitive sectors,  including relating to thermal coal, oil sands, hydraulic fracturing (‘fracking’) and projects in the Arctic Circle.

You can read more about our restrictive policies in our Climate Change Statement (PDF 352KB)

Climate change

Guiding principles to reach net zero

As one of the world’s largest banks, with a significant capital markets franchise, Barclays can make a real difference in helping accelerate the transition to a low-carbon economy.

About BlueTrack™

Our methodology for measuring our financed emissions, and tracking them at a portfolio level against the goals of the Paris Agreement.

Our 2019 ESG report

Our climate dashboard

Showing our ‘carbon limit’ by sector, and tracking our financed emissions against our benchmarks.  It also shows our operational emissions performance.