Barclays Limits Funding for New Oil and Gas Projects

Barclays, a prominent global banking institution, has made a significant announcement regarding its stance on financing for oil and gas projects. The banking giant revealed that it will no longer provide direct funding for new ventures in the oil and gas sector, and it will restrict lending to energy companies intending to expand their fossil fuel production.

The decision marks a departure from Barclays’ previous role as a major lender to the fossil fuel industry and comes amid mounting pressure from various stakeholders to reduce its support for the sector. Environmental groups have long criticised Barclays for its significant financial backing of fossil fuel initiatives, particularly in light of the escalating climate crisis.

According to a report from the Rainforest Action Network, Barclays emerged as the largest funder of the fossil fuel sector in Europe between 2016 and 2021, with funding totalling nearly $16.5 billion in 2022 alone. However, this figure represents a notable decrease from previous years, where funding exceeded $30 billion in both 2019 and 2020.

Barclays’ decision to curb its support for the fossil fuel industry comes in response to mounting pressure from environmental campaigners, shareholder activists, and public figures. Last year, actress Emma Thompson and film director Richard Curtis were among those who urged the All England Lawn Tennis Club to sever ties with Barclays, accusing the bank of profiting from environmental degradation.

In its Climate Change Statement, Barclays outlined several key restrictions on its financing activities in the fossil fuel sector. These include a halt to direct funding for projects aimed at expanding oil and gas production, as well as infrastructure projects related to such endeavours. Additionally, Barclays will cease direct funding for oil and gas projects in environmentally sensitive areas such as the Amazon and the Arctic Circle.

However, critics argue that Barclays’ plan does not go far enough in addressing the environmental concerns associated with fossil fuel extraction. Campaign groups have highlighted loopholes in the plan, particularly its failure to rule out financing for companies exclusively focused on fossil fuel extraction, including controversial practices such as fracking.

While the announcement was welcomed by some advocacy groups, including ShareAction, others, such as Make My Money Matter, deemed Barclays’ plan as inadequate in scope and ambition. Despite these criticisms, Barclays has emphasised that oil and gas funding constitutes only a small fraction of its overall activities, signalling its commitment to addressing climate-related risks in its lending practices.