Barclays quietly introduces tougher deforestation rules

The bank quietly added a new Forestry and Agricultural Commodities statement to its website this week, while all eyes were on its annual general meeting (AGM) in London on Wednesday (3 May). The statement stipulates that Barclays has “no appetite” to support companies directly involved in illegal forest clearance.

From the beginning of July, the statement confirms, beef producers will not be able to undertake work in areas of the Amazon rainforest cleared or converted after 2008.

Those producing beef in South America will also need to prove that they gave deforestation-free supply chains by 2025. By the end of 2025, these firms will need to update their policy commitments on deforestation and human rights, and to monitor and report on deforestation-free product volumes.

Barclays has claimed that it has not financed organisations complicit in beef-led deforestation in key South American regions since 2021. However, it has been subject to scrutiny for continuing to finance meat giant JBS. Feedback estimates that Barclays was the world’s biggest financier of JBS between 2015 and 2022, providing some $6.7bn.

Palm oil focus

The palm oil sector is also covered in the new statement. Businesses will need to have a no deforestation, no peatland and no exploitation commitment covering operations and the supply chain by this July. They will also need to either be a member of the Roundtable on Sustainable Palm Oil (RSPO) or working towards membership within three years. By 2025, they must have a fully traceable supply chain.

The risk associated with non-compliance is potential divestment.

“In cases where clients are identified as non-compliant with the mandatory requirements, Barclays will require the client to develop and implement an action plan to remediate this within a limited timeframe,” the statement says. “Where these clients are unable or unwilling to do so we will seek to exit the relationship taking into account existing contractual arrangements.”

Mighty Earth has expressed disappointment that Barclays has not clearly defined areas of high deforestation risk and has also called for better processes to identify non-compliance, beyond the use of client data.

Drama at the AGM

As noted, Barclays hosted its AGM in London this week. Proceedings were disrupted by several dozen climate activists, criticising the bank’s continued lending to the fossil fuel sector.

ShareAction estimates that Barclays provided $46bn to oil and gas expanders between 2016 and 2021. Reclaim Finance claims that, between April 2021 and December 2022, it provided a further $8.4bn to these companies.

The bank did update its emissions targets for the power sector and set tougher coal exclusion policies earlier this year.

At the AGM, climate activists from Fossil Fuel London dressed in Shakespearean ruffs and hosted a dramatic play generated by ChatGPT on fossil fuel financing. A choir from Money Rebellion interrupted the AGM with a rendition of ‘Don’t Stop Me Now’ by the Spice Girls.

Related news: Pension providers accused of undermining net-zero commitments by bankrolling deforestation 

Related blog: How businesses can turn the tide on deforestation

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