Barclays and NatWest to give shareholders ‘say on climate’
Banking giants Barclays and NatWest have confirmed that shareholders will get the chance to vote on their climate targets at their forthcoming AGMs, for the first time.
At Natwest, shareholders will be asked whether they support the bank’s “strategic direction” on climate at its AGM in Edinburgh next month. The company set a 2050 net-zero target back in 2020, along with an interim commitment to at least halve the climate impact of financial activities and decisions by 2030.
Since then, it has joined the Partnership for Carbon Accounting Financials (PCAF) in a move which will require it to publicly disclose the climate impacts of projects it finances, and become a founding member of the Prince of Wales’ Financial Services Task Force on net-zero.
NatWest is currently developing an updated climate transition plan, promising alignment with the Paris Agreement’s 1.5C pathway. It revealed this week that it has put the sector-specific targets detailed in the plan forward to the Science-Based Targets initiative for verification.
NatWest Group’s chief executive Alison Rose said: “Tackling climate change is a key strategic priority for NatWest Group. It is also near the top of the agenda for many of our shareholders, and we want to work with all of our stakeholders to help shape our future planning, execution and reporting on climate.
“We have already set out bold targets to help tackle climate change and to support the UK economy’s transition to net-zero. We believe being transparent about our progress is vital, which is why we have decided to give our shareholders this say on climate.”
Similarly, Barclays has this week confirmed that shareholders will get a “say on climate” at its 2022 AGM, which will take place in Manchester in May.
The bank published an updated climate strategy as it sent out the notice of the AGM on Wednesday (23 March). Barclays signalled its support for net-zero by 2050 back in 2020, but has been slow to provide detailed information on delivering this ambition, much to the frustration of sustainability-minded investors and environmental campaign groups.
Detailed in the new climate strategy are commitments to end financing for thermal coal mining and power plants by 2030 in OECD nations and by 2035 elsewhere. There is a notable exception to this rule for coal power plants in the US.
There are no new commitments to limit or end financing for oil and gas companies – including any commitments to limit or end financing for specific activities like oil sands. The strategy acknowledges that most oil and gas majors “are not yet on a 1.5C-aligned pathway” but argues that engagement would be better than divestment, stating that “it would be impracticable for Barclays to try to impose restrictions on financing specific activities”.
However, there are new 2030 emissions targets for the energy and power sectors. The energy target is to cut absolute portfolio emissions by 40%, against a 2020 baseline. The power sector target is to reduce the carbon intensity of Scope 1 (direct) and Scope 2 (power-related) emissions by at least 50% within the same timeframe.
New 2030 targets are also outlined for steel and cement. As with power, they are intensity-based and do not cover indirect (Scope 3) emissions. Targets for the automotive, manufacturing and residential real estate sectors will be finalised later this year.
Sustainability-minded investors have already expressed disappointment in the strategy, arguing that it is too little, too late.
ShareAction’s senior research officer Lydia Marsden said: “Barclays’ Say on Climate plan lacks the ambition needed to address the climate crisis. By failing to update its oil and gas policy it can continue to finance Paris-misaligned activities such as oil sands and new oil and gas. Investors need to question whether Barclays’ policies and targets truly mark progress or instead enable business as usual for its clients. We call on them to vote against this plan at the bank’s 2022 May AGM.”