Barclays has financed more in fossil fuel projects than any of the UK’s largest banks in the months leading up to the Cop26 climate talks in Glasgow, according to a report by climate finance campaigners.
The bank financed $5.6bn (£4.1bn) for new fossil fuel projects from January 2021 to the eve of the UN climate summit, Market Forces found, despite growing international warnings that any new fossil developments would destroy any chance of avoiding a catastrophic climate breakdown.
Barclays’ multibillion pound support for fossil fuel projects was ranked ahead of that of HSBC, which financed $5.3bn this year, and Standard Chartered, which made $4.3bn available.
The report found Barclays financed a $194m bond to the Canada-headquartered pipeline company Enbridge, which part-owns the controversial Dakota access pipeline which is expected to carry enough crude oil to produce the emissions of 30 coal plants every year. It also said the bank provided $200m to MEG Energy, which extracts Canadian tar sands oil, one of the most polluting fuels on the planet.
The report also revealed how HSBC and Standard Chartered participated in a $6bn bond issuance to Saudi Aramco, the world’s most polluting company, and that HSBC financed a $1.5bn bond to Qatar Petroleum, which owns the world’s biggest gas field.
The three banks have extended financing to fossil fuel companies despite committing to net zero carbon emissions from financing activity by 2050 and issuing warnings that no new fossil fuel projects are compatible with keeping global heating in check.
The report’s findings came ahead of a series of Cop26 events scheduled for Wednesday that are intended to mobilise public and private finance to help tackle the climate emergency.
Mia Watanabe, a campaigner at Market Forces, said: “Despite their warm words, these banks continue to finance fossil fuel companies and projects that are destroying the world’s hopes of meeting climate targets.”
In a stunt to mark the latest report, Market Forces held a Formula One-style “prize giving” for the banks’ “race to disaster” outside Barclays’ Glasgow offices, which is a stone’s throw from the Cop26 venue.
A previous annual report by the group that tracked global fossil fuel financing found that in the five years after the signing of the Paris agreement, the three banks combined financed more than $257bn in the coal, oil and gas sectors.
That report found Barclays was the world’s seventh-biggest fossil fuel funder, and the biggest in Europe, while HSBC was ranked 13th in the world. Although Standard Chartered trailed at 34 globally, it is also the top UK financier of new coal plants in Asia, according to Market Forces.
The latest report follow news that Jes Staley has stepped down as the chief executive of Barclays after an investigation by City regulators into how he described his relationship with the billionaire sex offender Jeffrey Epstein.
Standard Chartered said last week that it would set “ambitious new targets” to reach net zero from financed activity by 2050, including interim 2030 targets for the most carbon-intensive sectors, that were aligned with the International Energy Agency’s scenario for a net zero energy system by 2050.
The global energy watchdog said in May that there could be no new oil, gas or coal development if the world was to reach net zero by 2050. Only days later a UN report warned that fossil fuel production planned by the world’s governments “vastly” exceeded the limit needed to keep the rise in global heating to 1.5C and avoid the worst impacts of the climate crisis.
“The science is clear – banks that keep funding fossil fuels can’t be climate leaders,” Watanabe added.
An HSBC spokesperson said the bank was “firmly committed” to aligning its provision of finance to net zero by 2050 or sooner. “We have committed to phase out thermal coal financing by 2030 in EU and OECD markets and by 2040 globally and to set out short and medium-term transition targets for the oil and gas and power and utilities sector. We expect to provide between $750bn and $1trn towards the net zero-transition by 2030,” the spokesperson added.
A Barclays spokesperson said: “We are aligning our entire financing portfolio to support the goals of the Paris agreement – significantly scaling up green financing, directly investing in new green technologies and helping clients in key sectors change their business models to reduce their climate change impact. By 2025, we will reduce the emissions intensity of our power portfolio by 30%, and reduce absolute emissions of our energy portfolio by 15%.”
This article was amended on 3 November 2021 to include a statement from Barclays that was not available at the time of publication.