Barclays: It’s Unrealistic for Banks to Ditch Oil and Gas Clients

Calls from campaigners and activist investors for banks to abandon financing for the oil and gas industry are unrealistic, according to the top executive of banking giant Barclays.

Banks “cannot go cold turkey” on financing the oil and gas sector, Barclays chief executive officer C.S. Venkatakrishnan told Bloomberg during the Bloomberg Sustainable Finance Forum in London on Tuesday.

Environmental campaigners and shareholder activists have been calling for a halt to financing for coal, oil, and gas, and have been accusing the banks supporting fossil fuel projects of funding the wrecking of the climate.

Last month, a report from activists and campaign groups showed that banks have financed fossil fuels with $6.9 trillion since the Paris Agreement was signed in 2015, with $705 billion provided in 2023 alone. 

The 15th annual Banking on Climate Chaos (BOCC) showed that JP Morgan Chase is the number-one fossil fuel financier in the world, committing $40.8 billion to fossil fuel companies in 2023. JP Morgan leads in financing since the 2015 Paris Agreement, too, followed by Citigroup and Bank of America.

Barclays ranks eighth for most money extended to fossil fuels since 2015, with $235.2 billion in funding, making it Europe’s biggest lender to the fossil fuel industry, the report found.

Earlier this year, Barclays announced that it would drop direct funding for new oil and gas projects, joining other major European banks in halting the financing of fossil fuel expansion.  

Europe’s biggest lender to fossil fuel projects pledged to restrict financing for oil and gas, including direct funding for new projects, in a move welcomed by environmental groups. The bank will also require its energy clients to have 2030 methane reduction targets, a commitment to end all routine/non-essential venting and flaring by 2030, and near-term net-zero-aligned Scope 1 and 2 targets by January 2026.

Campaigners, however, say that Barclays could have gone further in its commitments and that the announcement of the UK banking giant now puts pressure on the U.S. banks, which are the top lenders to the fossil fuel industry—JP Morgan, Bank of America, and Citi.

By Charles Kennedy for Oilprice.com

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