Barclays urged to stop coal and oil investments

1 May 2019, 13:19 | Updated: 1 May 2019, 15:19

A group of Barclays' investors has written to the boss of the bank urging him to stop funding companies involved in coal mining or oil sands exploitation.

The investors, including management firms Hermes EOS, Edentree, Boston Common and Sarasin & Partners, manage and advise on assets worth more than $1trn (£765bn) between them.

They have put their names to a letter sent to chief executive Jes Staley and organised by the campaign group ShareAction, which says it promotes "safe and sustainable" investment.

The increasing corporate pressure to act on climate change follows 10 days of protests in the capital by the Extinction Rebellion group which included activists gluing themselves to the entrance of the London Stock Exchange.

The letter to Barclays also comes after investors pressured HSBC to end all financing of new coal-fired power stations last month.

In the letter, which has been seen by Sky News, Barclays is described as "Europe's third biggest private sector bank supporter of companies planning coal power expansion around the world".

It points to Barclays offering financial services to companies funding coal-based projects in Australia, Bangladesh and Germany.

It is also signed by the fund management arm of the Methodist Church, as well as the head of the Environment Agency's pension fund.

The letter has been sent to the bank the day before Barclays holds its annual general meeting in central London.

It calls on Barclays to prohibit financing of new projects tied to oil sands and their pipelines, a clear reference to the controversial tar sands explorations in Canada.

Environmental campaigners have long maintained that proposals to extract oil and build three pipelines could cause irreversible damage.

It also asks the bank to halt any new corporate financing to companies that are "highly dependent" upon coal mining, coal power or oil sands, to set a clear plan to phase out existing exposure to coal-based investments and also to invest more in low-carbon assets.

Failure to do so, the letter says, "presents a real reputational risk for Barclays and places the bank at risk of losing clients".

Sonia Hierzig, from ShareAction, said: "Pressure to respond to the challenge of climate change is inescapable and coming from all directions.

"Investors know that climate change poses a material financial risk to their investments, and they're taking action to manage that.

"Barclays would do well to heed their call for the good of our savings and the world we will retire into."

A source within Barclays said they "appreciate the positive dialogue with ShareAction" and that they "understand the arguments… and are working earnestly to find a solution".