Our reaction to Barclays – Take the lead on the challenge of climate change
November 18, 2014
Dear David Wheldon,
Thank you for your response regarding public demand for divestment from fossil fuels. Barclays is the second UK bank to respond (after Lloyds), and we appreciate your commitment to advancing sustainability in the UK and beyond.
Recognising that “the move towards a low carbon economy is a challenge which has to be met if we are to address inevitable climate change and prevent further damage” is a great first step. As one of Britain’s five biggest banks, Barclays can play a critical role in this process.
As recently recognised by Mark Carney, Governor of the Bank of England, over two-thirds of known fossil fuel reserves are “unburnable” and must remain in the ground. At the same time, the financial case for divestment is getting harder to ignore – with oil becoming increasingly unprofitable, and sustainable banks and indices outperforming those invested in fossil fuels.
Fossil fuel investment has never been environmentally acceptable. It is now no longer socially acceptable. And it is fast becoming economically unacceptable too.
Barclays is a major investor in fossil fuel extraction, with more than £15.5 billion in outstanding corporate loans, equities and corporate bonds by 2012. It’s quite simply irresponsible to be so exposed to fossil fuel investments, particularly at a time when there is such clear demand from the public for divestment from fossil fuels.
The Equator Principles seem to be a strong move towards a more transparent environmental supporting system, but on their own seem insufficient in preventing large-scale and irreversible damage to our climate – particularly since they only seek to “minimise, mitigate or offset” irreversible “negative impacts on eco-systems, communities and the climate”.
You mention that Barclays applies “stringent environmental and social impact assessment policies” to all financing decisions – other than the Equator Principles, are these policies publicly available? We note that despite these policies, Barclays is still an investor in a number of damaging fossil fuel companies, including major fracking companies iGas Energy and Third Energy.
Barclays help in “directing” £4 billion of financing to the clean energy sectors is a fantastic start, but the UN has estimated that at least £1 trillion worth of investment needs to be made to have a lasting impact in halting disastrous climate crisis. With such high levels of investment in fossil fuel companies, it’s hard not to conclude that Barclays’ impact on transitioning to a low-carbon future is yet to be a net positive.
Barclays has the opportunity to become a leading example of a responsive, clean, and responsible bank, by committing to divest from fossil fuels. As a result, we call on you to:
- Disclose all of Barclays’ investments in the fossil fuel industry within three months; and
- To commit to a 5-10 year plan to divest from fossil fuel investment within three months
In the absence of such commitments, we will have no choice but to continue to recognise Barclays as a key driver of climate change and fossil fuel extraction. This will remain the case until you have made a solid, lasting, and credible commitment to fossil fuel divestment, as outlined above.
There has never been more reason or imperative to divest from fossil fuels and to reinvest sustainably. All the evidence suggests catastrophic impacts if we do not act now, but there is also increasing evidence that investing sustainably can actually help to strengthen banks themselves, as well as the societies that they serve.
I hope that you will use your position as Managing Director in Brand, Reputation, Citizenship and Marketing to secure these pledges from Barclays, and that your commitment to building a secure, stable and fossil-free future is as genuine as ours.
Yours in hope and with warm regards,
Move Your Money UK