Achieving net zero operations
Barclays is working to reduce its Scope 1, Scope 2 and Scope 3 operational emissions consistent with a 1.5°C aligned pathway and counterbalance any residual emissions.
Addressing climate change
We are clear that addressing climate change is an urgent and complex challenge. It requires a transformation of the global economy to become less reliant on fossil fuels, whilst scaling up alternative and renewable energy sources, technologies and infrastructure, to heat our homes and power businesses. There are legitimate concerns about energy security and energy poverty – but it is even more imperative to accelerate the energy transition. Despite the near-term challenges, our commitment to our climate ambition and strategy is unchanged.
In March 2020 we were one of the first banks to announce our ambition to be a net zero bank by 2050, by reducing our own operational emissions and our financing of our clients’ emissions to as close to zero as possible, and offsetting or removing any residual emissions.
Our climate strategy means we are rapidly expanding our green and sustainable financing activities, whilst significantly reducing our fossil fuel financing. Our lending to the oil, gas and coal sectors has reduced by 17% to £12.9bn since 2020*, while our capital markets financing to oil & gas, and mining sectors dropped by 51% to £8.5bn. Over the same period our green financing increased 70% to £29.8bn. As we rapidly transition our financing activities, we anticipate we will provide more green financing than fossil fuel financing in the near future.
What does this mean in practice?
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 companies that are building up low-carbon capacity and capability.
We have already facilitated £74 billion of our £100bn green financing target, which includes supporting the UK Government to issue their first green bond, which will finance green government projects such as offshore wind and schemes to decarbonise homes and buildings. We’re investing £175m into sustainability-focused start-ups, such as Air Protein, whose technology turns elements in the air into sustainable ‘meat’, and zero-emission battery company, Energy Dome, which uses CO2 to store electricity.
Alongside financing the transition, we must reduce our financed emissions, which are those which result from our clients’ activities. We are committed to align all our financing to the goals and timelines of the Paris Agreement. This means we have set our 2030 targets in order to keep the global temperature rise below 1.5 degrees. To do this, we are reducing our financed emissions in four of the highest emitting sectors in our financing portfolio, with additional 2025 targets for the two highest-emitting sectors – energy and power.
We are being fully transparent about the progress we are making. Our financed emissions for the energy sector have already dropped by 22% since 2020, against the internationally set target of a 40% reduction by 2030. Our fossil fuel financing has declined by 35% over the same time. In the coming years we will continue to set targets for other sectors.
The drive to net zero will be one of the defining issues of our lifetime, with implications for each one of us, and current events show us that this progress will not be smooth, painless, or linear. We are making rapid progress in changing our business to drive a just transition, remaining firmly committed towards our targets and our net zero ambition.
The industrial revolution took over a century to transform the planet, and we cannot hope to undo overnight its deleterious impact on the environment. We are still at an early stage of a long journey-but are committed to the destination and will persevere to reach it. One of my foremost priorities is for Barclays to demonstrate steady and significant progress against our net zero ambition.
Group Chief Executive
Addressing climate change is an urgent and complex challenge. It requires a fundamental transformation of the global economy, so that society stops adding to the total amount of greenhouse gases in the atmosphere.
At Barclays, we are determined to play our part.
In March 2020, we announced our ambition to be a net zero bank by 2050, becoming one of the first banks to do so.
We have a strategy to turn that ambition into action.
1. Achieving net zero operations
2. Reducing our financed emissions
3. Financing the transition
In line with our commitment to give our shareholders a ‘Say on Climate’, we gave shareholders an opportunity to vote to endorse our climate strategy, targets and progress at our 2022 Annual General Meeting. These are set out in Barclays’ Climate Strategy, Targets and Progress 2022 (PDF 9.2MB). Read more on our AGM page.
More information about our climate strategy is also available on the following pages.
