Barclays Updates Climate Policy to Support Energy Transition

Barclays announced revisions to its Climate Change Statement to further align its financing activities with global efforts to combat climate change. The bank stated it would cease direct financing for new upstream oil and gas expansion projects and related infrastructure. Additionally, it introduced restrictions for new clients in the energy sector engaged in expansion and for existing clients not diversified in their energy sources and planning long-term expansion.

The bank outlined specific requirements for its energy sector clients, including the establishment of methane reduction targets by 2030, a commitment to eliminate routine venting and flaring by the same year, and the setting of near-term net-zero aligned targets for Scope 1 and Scope 2 emissions by January 2026. Clients are also expected to present transition plans or decarbonization strategies by January 2025.

Key Policy Updates

• Halting Financing for Oil and Gas Expansion: Barclays will no longer provide project finance or other direct finance to energy clients for upstream oil and gas expansion projects or related infrastructure.
• Restrictive Measures on Energy Clients: New and non-diversified energy clients planning expansion face restrictions, aiming to guide investments towards companies actively transitioning towards low-carbon models.
• Methane Reduction and Decarbonisation Goals: Energy clients are required to set methane reduction targets for 2030, commit to ending routine venting and flaring, and establish near-term net-zero aligned Scope 1 and 2 targets by January 2026.
• Transition Finance Framework: To achieve its $1 trillion Sustainable and Transition Finance target by 2030, Barclays introduces a framework to support decarbonisation efforts in high-emitting sectors.

Barclays’ policy revision comes in the context of the International Energy Agency’s Net Zero Emissions (NZE) scenario, which suggests that new long-lead time upstream oil and gas projects are not necessary on a pathway aligned with limiting global warming to 1.5°C. The bank emphasized the importance of secure, reliable, and affordable energy while supporting the transition to cleaner energy sources.

The announcement follows stakeholder engagement with shareholders, clients, climate experts, and civil society groups. Barclays also highlighted its ongoing commitment to engage with stakeholders as its climate strategy progresses.

Furthermore, Barclays has established a new Energy Transition Group within its Corporate and Investment Bank to provide clients with expertise and guidance on the energy transition.