Action on climate change at Barclays AGM

Lankelly Chase takes action on climate change at Barclays’s AGM   

Lankelly Chase is one of 11 institutional investors and more than 100 individual shareholders which have taken action today at Barclays by asking the bank to phase out its financing of fossil fuel companies that are active agents in driving the climate crisis. We are grateful to ShareAction, the responsible investment charity, for coordinating this collaboration.

Julian Corner, CEO of Lankelly Chase, says: “Time is running out to prevent global heating of 1.5c above pre-industrial levels, with catastrophic consequences, and it is now imperative that financing for fossil fuels must stop. We therefore urge the Barclays Board and our fellow shareholders to support this resolution at the AGM. Unless Barclays can demonstrate alignment with the Paris Agreement, it can no longer have a place in the portfolios of any responsible investor.”

Shareholder resolution

The group has filed the first climate change resolution at a European bank, which will be voted on by Barclays’s investors at its Annual General Meeting in May 2020. We are asking the bank to publish a plan to phase out the provision of financial services (including project finance, corporate finance, and underwriting) to companies in the energy sector, as well as gas and electric utilities that are not aligned with the goal of the Paris climate agreement to limit global average temperature increase to well below 2°C above pre-industrial levels, and pursue efforts towards 1.5°C.

Since the Paris Agreement was signed in 2015, Barclays has provided more than US $85 billion of finance to fossil fuel companies and high-carbon projects such as tar sands and Arctic oil and gas. This makes it the world’s sixth largest backer of fossil fuels and the largest of any bank in Europe by some degree.
The resolution also asks Barclays to consider the social dimension of the transition to a resilient and low-carbon economy. This makes it the first climate change resolution to include a so-called ‘just transition’ ask in its supporting statement.

Our approach to our investments and the climate crisis

We’re trying to approach our investments in a way that helps transform (rather than sustain) the systems which perpetuate severe and multiple disadvantage. This includes action on climate change, which we consider to be an outcome of these same systems and itself a factor exacerbating inequities and injustice.

In November 2019, we joined other charitable foundations to launch the Funder Commitment on Climate Change, highlighting the serious risks which the climate emergency presents to the achievement of our mission, and committing to take action through our investments and beyond.

We do not invest in companies deriving more than 10% of their revenue from fossil fuel production for a number of reasons. First, these businesses must completely transform or even cease to exist in order to limit global average temperature increase in line with the Paris Agreement. We do not believe that our continued investment in them, even when coupled with engagement, will support the conditions for this shift. We also believe that the unsustainable nature of their activity implies serious financial risks for investors, regardless of any profits which may be extracted in the short-term.

DivestInvest is a necessary step, but the much wider range of companies that are instrumental in sustaining our carbon-intensive socio-ecological system means we need to act more deeply, broadly and systemically. In the case of banks, we believe that shareholder engagement can have a greater impact, since direct lending to the fossil fuel industry is often a small portion of their business while unabated global heating has huge consequences for their profitability.

We expect our investment portfolio to change significantly during 2020, but will look to explore similar actions with companies we are invested in.

We invite you to read more about our investment strategy and to get in touch if you’d like to talk about it. Email or tweet us @lankellychase.