Barclays tightens lending for dirtiest fossil fuels

A branch of Barclays Bank is seen, in London
A branch of Barclays Bank is seen, in London, Britain, February 23, 2022. REUTERS/Peter Nicholls

LONDON, Feb 15 (Reuters) - Barclays (BARC.L) on Wednesday said it was tightening lending criteria for coal power and would stop financing oil sands exploration and production, but did not announce new restrictions on oil and gas lending as some rivals have.

The British bank extended a previously announced plan to phase out financing for clients involved in coal-fired power generation by 2030 from the UK and European Union, to include other countries in the Organisation for Economic Cooperation and Development.

Banks globally have been detailing their plans to cut emissions and keep a lid on the rise in global temperatures, but environmental campaigners accuse them of moving too slowly and have called on them to stop financing new oil and gas drilling.

Announcing results for 2022, Barclays said it will stop financing all oil tar sands companies, as well as new oil sands pipelines, whereas previously it had said it would work with those firms undertaking efforts to reduce their emissions.

However, some environmental activists had hoped the bank would announce a new policy on financing for oil and gas, after HSBC said in December it would stop direct funding new oil and gas fields. NatWest and Lloyds have also said they will stop some direct finance for new oil and gas.

Barclays also set its first emission-cutting target for the automotive manufacturing industry, with a pledge to reduce emissions intensity between 40% and 64% by 2030 against a 2022 baseline.

For the residential real estate sector, Barclays set a "convergence point" of reducing emissions by 40% by 2030, which it said was not a target because decarbonising UK homes was dependent on wider changes beyond its control.

Barclays said in its annual report that it had reduced its emissions for the energy, power, steel and cement sectors in 2022.

For energy, absolute emissions generated by its energy clients have dropped 32% since 2020 - putting it well on track for its target of a 40% reduction this decade - but the bank acknowledged the decline was helped by cash-rich energy customers needing less finance.

Campaign groups said they were disappointed Barclays had not made further commitments to curtail financing fossil fuel expansion and that it had failed to match the ambition of its peers.

"By continuing on this path, Barclays is ignoring the science and disregarding its customers," Tony Burdon, CEO at Make my Money Matter said in a statement.

ShareAction's Jeanne Martin called on Barclays to update its oil and gas policy before its 2023 annual general meeting "to meet science-based standards on climate", or face further shareholder pressure.

Reporting by Tommy Reggiori Wilkes; Editing by David Holmes, Jane Merriman and Mike Harrison

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