‘Ambition’ is not enough. Investors must vote for action at Barclays’s AGM

Lankelly Chase is one of 11 institutional investors, and over 100 individuals, which have co-filed a shareholder resolution at Barclays’s Annual General Meeting in May 2020. If passed by at least 75% of investors who vote, our resolution would require Barclays to phase out all financing of fossil fuels in order to contribute to the goals of the Paris Agreement.

Barclays has provided the highest level of fossil fuel financing of any European bank since the Paris Agreement was signed in 2015. Last year alone, it increased financing for fossil fuels by some £2.9bn. Outside of China, it is the second largest financier of coal power in the world.

Our resolution acknowledges that Barclays must set its own timetable for aligning its activities with the Paris Agreement. But it is absolutely clear that, for banks, alignment means phasing out financing for fossil fuels.

Today the Barclays Board – which includes the Finance Director of BP and a Director of off-shore oil driller Valaris – has announced a counter resolution which attempts to kick the can down the road.

By declining to support our resolution and proposing a long-term “ambition” instead, Barclays may hope to gain plaudits. But investors should note that that the UK Government has already enshrined a commitment to net-zero by 2050 in law and that Barclays is merely repeating undertakings it has made under the Principles for Responsible Banking.

By proposing an ‘ambition’ rather than a commitment, Barclays is asking permission to fall short of its own obligations. This ‘ambition’ represents no milestone or achievement. It is a rehash of an existing position timed, we fear, to distract from the co-filers’ resolution.

Dominic Burke, Investment Director of Lankelly Chase, says: “We need commitment not just ambition from a bank that only last year increased financing for oil, gas and coal companies by £2.9 billion. If a net-zero ambition does not involve phasing out fossil fuel financing, then what does it mean? Investors should ask what Barclays’s ambition will amount to if it doesn’t encompass at the very least a timescale for phase-out.

The time for carefully drafted position statements has passed. Investors must support the original resolution and show they intend to hold Barclays to account for its response to the climate emergency.”

Major investors have publicly declared their support for this plan, including the Church Commissioners and Church of England Pensions Board, Jupiter, Amundi, EdenTree and Nest , the UK’s largest pension fund by members.

Other investors and customers of Barclays must ask why its Board does not agree. If a net-zero ambition does not involve phasing out fossil fuel financing, what does it mean?

This is the first climate change resolution to be filed at a European bank and, unless we see action from the sector, there are undoubtedly more to come. Investors who are committed to the Paris Agreement goals and to averting a climate catastrophe face a historic choice. We must ensure the bar is set high at the AGM by supporting our resolution for action.