The bank said in a statement that the increase in its Sustainable Impact Capital investment mandate — expected to hit GBP 175 million by 2025 — reflects the funding needed to continue existing efforts and support new investments. The push will focus on carbon capture and hydrogen technologies.
Barclays has invested GBP 84 million in environmental startups in the past two and a half years. The lender said it is prioritising supporting clients as they transition to a low carbon economy. But its willingness to date to finance some of the world’s biggest polluters has made it the target of criticism by climate activists.
From the start of 2019 through last November, Barclays arranged roughly GBP 50 billion of financing via loans and bond sales for fossil-fuel companies.The move sees Barclays catch up with rival HSBC, which said in 2020 it aims to contribute up to GBP 1 trillion to companies to help them transition, and JPMorgan which has set a GBP 2.06 trillion of sustainable funding target by 2030.
Banks' climate efforts are increasingly in the spotlight, with campaigners and politicians alike raising concern the industry is not doing enough to manage the risks of global warming and help the real economy transition to cleaner energy.
Earlier in 2022, U.N. climate scientists warned the world was running out of time to cap the global temperature rise at 1.5 degrees Celsius above the pre-industrial average, and recent climate talks confirmed finance was not moving quick enough.
Even though plenty of financial institutions agree that it’s time to tackle the climate crisis, it isn’t easy implementing change at large financial institutions that have spent decades establishing rules of order.
Banks’ current sustainability offerings are typically incorporated in traditional lending products, and growth in these products has been remarkably strong. According to Bloomberg estimates, the combined volumes of sustainability-rated debt instruments have grown approximately 80% per year increasing from approximately GBP 127 billion in 2017 to more than GBP 1.3 trillion in 2021.
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