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Shareholder resolution at Barclays puts climate crisis centre stage

by  Natasha Landell-Mills, CFA  |  08 Jan 2020

584 - Barclays resolution

Today, as part of an initiative by ShareAction, we have joined a group of shareholders asking Barclays to phase out its financing of fossil fuel companies that are active agents in driving the climate crisis.

Sarasin & Partners have joined 10 other firms in filing a resolution at Barclays alongside over 100 individual shareholders. It will be voted on by investors at Barclays' annual general meeting in May 2020.

This landmark resolution – the first climate change resolution filed at a European bank – requests that Barclays publishes a plan to gradually stop the provision of financial services (including project finance, corporate finance, and underwriting) to companies in the energy sector, and to gas and electric utilities that are not aligned with the goals of the Paris climate agreement.

The proposal also encourages Barclays to consider the social dimension of the transition to a resilient and low-carbon economy, as per the Paris Agreement. This makes it the first climate change resolution to include a so-called ‘just transition’ ask in its supporting statement. Investors representing more than US $5 trillion have already expressed support for the just transition.

This resolution represents a significant opportunity for Barclays to bring its lending practices in line with global climate ambition and play an active role in accelerating the low-carbon transition.

Natasha Landell-Mills, Head of Stewardship, commented:

“Aligning financial flows with the goal of keeping temperature increases well below 2C, and preferably to 1.5C, was hard-wired into the Paris Climate Agreement for good reason. Continued financing of harmful fossil fuel activities puts this target at risk, with potentially devastating consequences for us all. And yet, this is precisely what is happening today, and Barclays is amongst the most prolific bank financiers globally of such activities.

“It is therefore vital that Barclays’ Board ensures that it no longer supports - whether through direct lending or underwriting - any activities that run contrary to the Paris Agreement. Failure to act leaves directors open to charges that they have failed to meet their obligations under the UK Companies Act. It also exposes the bank and its shareholders to heightened capital risks as decarbonisation accelerates. At a time of economic uncertainty, the Board should not be taking on additional risks."

Given the systemic threats posed by climate change, and the rising regulatory scrutiny of banks’ resilience to accelerated decarbonisation and climatic impacts, this resolution supports the long-term economic interest of shareholders.

Read the full press release by ShareAction