Barclays Looks to Avoid Greenwashing While Financing the Energy Transition - OilPrice.com
Barclays Looks to Avoid Greenwashing While Financing the Energy Transition | OilPrice.com
The copper market is grappling…
The energy consumption of Bitcoin…
UK banking giant Barclays is looking to avoid claims of greenwashing with a new set of guidelines about what ‘transition finance’ is and how its new transition finance team should apply it.
The bank, which has just published its ‘Barclays Transition Finance Framework’, says in the document that “As there is no universal consensus as to how to define "transition" activities, for purposes of financings included in our Target, Barclays has developed its own definition of transition finance.”
Per Barclays’ methodology:
“Transition finance is any financing including lending, capital markets and other financing solutions provided to clients for activities (including technologies) that support greenhouse gas emission reduction, directly or indirectly, in high-emitting and hard-to-abate sectors towards a 1.5 degree pathway.”
Barclays has also developed a set of transition finance principles to guide its transition finance team in the application.
The challenge in transition finance “is to do that in a way that is robust and can withstand scrutiny,” and without raising “concerns that by putting capital to work in some of these hard-to-abate sectors you’re effectively greenwashing,” Daniel Hanna, Head of Sustainable Finance at the Barclays Corporate and Investment Bank, told Bloomberg in an interview.
At the end of last week, Barclays said in its revised Climate Change Statement that it would no longer provide project finance, or other direct finance to energy clients for upstream oil and gas expansion projects or related infrastructure. The bank will also impose restrictions for new energy clients engaged in expansion of oil and gas, as well as restrictions on non-diversified energy clients engaged in long lead expansion. Barclays is putting additional restrictions on unconventional oil and gas, including Amazon and extra heavy oil.
The bank will also require its energy clients to have 2030 methane reduction targets, a commitment to end all routine / non-essential venting and flaring by 2030, and near-term net-zero aligned Scope 1 and 2 targets by January 2026.
ADVERTISEMENT
“Today we strengthen our commitment to the energy transition, with policies that will focus our capital and resources to the energy companies that play a key role in the transition,” said Laura Barlow, Group Head of Sustainability.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Join the discussion| Back to homepage
ADVERTISEMENT
Related Knowledge Center: Climate diplomacy
Talks are well underway in preparation for the next major international meeting on climate change, 28th Conference of the Parties (COP28), scheduled to begin Nov. 30 in the United Arab Emirates.
Much like last year’s COP27, finances — specifically, aid to developing nations — will be at the center of conference deliberations.
The conference faces an even greater sense of urgency brought on by the Sept. 8, 2023, release of the first global stocktake, which calls for accelerated action to meet the goals set in the 2015 Paris Climate Agreement (COP21).
Climate diplomacy: COP 27 | Climate diplomacy: COP 28 | Climate diplomacy: COP 29