Europe’s biggest financier, Barclays, will stop funding Canadian new oil sands investments this year, the company said in its annual report Wednesday..As part of its environmental policy it will only provide financing to oil sands clients who have projects “to reduce materially their overall emissions intensity, and a plan for the company as a whole to have lower emissions intensity than the level of the median global oil producer by the end of the decade.”.Under its previous policy, the bank would only provide financing to oil sands exploration and production companies — defined as those that majority own or operate oil sands exploration, production and processing assets, that generate more than 10% of revenue from these activities. .The new policy was broadened to include the construction of new oil sands production and/or processing assets and pipelines whose primary use is for the transportation of crude oil extracted from oil sands, it added. Not that it mattered, the company’s exposure was virtually nil in 2022..In addition, the company plans to phase out existing financing for coal-fired power generation in the US and UK by 2030, and eliminate it altogether by 2035. It’s all part of a drive to raise up to $1 trillion US in social, environmental and sustainability-linked funding for global climate tech start-ups in the same period..“Barclays recognizes the importance of a just transition in planning the transition towards a low-carbon economy,” it said..In reality, the move has more to do with money than any kind of moral obligation. In the 1990s Barclays was accused of financing Zimbabwe’s Robert Mugabe. As recently as 2009 it was further accused of violating international money laundering statutes..Nonetheless, the report identifies what it says are three levels of “climate risks” — including carbon taxes as one example —that could cause unexpected financial losses..“As the world transitions to a low-carbon economy, financial institutions such as Barclays may face significant and rapid developments in stakeholder expectations, policy, law and regulation which could impact the lending activities Barclays undertakes, as well as the risks associated with its other portfolios, and the value of Barclays’ financial assets,” it says..Despite concerns over the sourcing of materials for electric car batteries in countries with poor environmental and social labour records, Barclays intends to expand personal loans for the purchase and financing of electric vehicles, which it says represents a potential market opportunity of $240-400 billion for Barclays, with EV sales expected to increase ten-fold in the next 10 years, reaching up to 97% of annual car sales by 2030 in the UK. Barclays further expects the markets to be primarily driven by policy and legislation — “for example, the UK policy to ban sale of new petrol and diesel cars from 2030.”.The move comes after a coalition of environmental groups, including the Sierra Club and Rainforest Action Network, issued a report identifying Barclay’s as the seventh-largest fossil fuel lender in Canada, behind RBC and TD Bank, which lent out about $5.4 billion US each in 2021. CIBC was a distant third at $2.2 billion. Barclays barely cracked the Top 10 with $330 million..It further accused major Canadian and US banks of “greenwashing” climate policies, particularly with respect to oil sands financing..“Despite fierce — and still ongoing — resistance to its construction, in 2021 Enbridge’s Line 3 tar sands pipeline came online, giving upstream producers greater access to export markets in the US. At the same time it was pushing through this climate-damaging and rights-abusing project, Enbridge issued sustainability-linked financing, linked to operational emissions intensity targets and greenwashed by major Canadian banks like CIBC and global peers like Bank of America and HSBC.”
