Barclays

overall rating:

1.8

planets

Lisa Liu
7/15/2022
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Barclays provides current accounts, mortgages, savings and investment management services, credit cards, and business banking services to retail clients and small and medium-sized enterprises. Barclays has taken the decision to integrate ESG reporting into this year's Annual Report. They provide the latest insights to help solve sustainability, together to help businesses and markets seek new and innovative ways to achieve net zero. Based on Barkley's Climate Strategy, Targets, and Progress 2022, I hold optimistic attitudes toward the company’s future ESG performance and commit to the net zero goal in the future. The bank has promoted initiatives around social equity such as the Social Innovation Facility and financial packages that promote ESG performance through portfolio management. Hence, I give the bank a rating of 1.8 out of 3.

What it's made of:

2

Barclays is a universal bank headquartered in the United Kingdom. It operates via two principal segments; the U.K. and the International. The international segment includes a corporate bank offering banking solutions to large corporations, a bulge-bracket global investment bank, and a credit card and payments business. In 2018, Barclays generated roughly 52% of its income from the U.K. and 34% from the United States. As stated on its website, with a critical focus on the impact of our financing, Barclays is continuing to grow our product offering and social and environmental financing activity across the bank. As a corporate and investment bank, Barclay created sustainable green solutions as well as a research impact series, a series of in-depth reports from the Barclays’ Research team which explores the social impact of economic, demographic, and disruptive changes affecting markets, sectors, and society at large. Barclays also launched Green Loans that can help to future-proof your business with financing that places green principles at its core, allowing you to invest in a sustainable, low-carbon future, so I think that this suggests that Barclays has good intentionality with regards to the environment.

How it's made:

1.5

With respect to the Environment, Barclays is committed to “aligning its financing with the goals and timelines of the Paris Agreement”. Setting 2030 targets, all of which integrate a 1.5°C-aligned scenario, to reduce financed emissions across four of the highest-emitting sectors in their portfolio: Energy, Power, Cement, and Steel. Barclays plans to continue this work until they have set targets for material high-emitting sectors in the portfolio, which they aim to have completed by 2024, consistent with commitments as a founding member of the Net-Zero Banking Alliance. Overall, Barclay has made determined efforts on the company’s overall ESG performance, as reflected in the company’s sustainability reports.

 

In the Social aspect, Barclays is launching a series of impact investing products for family offices, foundations, and retail investors. At the heart of impact investing is the aim to generate financial returns as well as positive social or environmental outcomes with your investments. The Barclays Social Innovation Facility (SIF) is an internal mechanism that incubates colleague ideas for financial products and services that seek to specifically address environmental or social challenges. The SIF was launched in 2012 and continues to be one of Barclays’ most innovative mechanisms to advance socially and environmentally impactful products and services in a commercial way. As sustainable finance markets mature and our businesses incorporate ESG considerations into product development, SIF aims to become a center of excellence for disruptive financial products and services by providing seed support to commercially valuable propositions and the colleagues and teams championing them. For example, Barclays Women in Leadership Index (WIL) was incubated through the SIF. The index features companies with a female CEO or more than 25% female representation on corporate boards, building awareness of the importance of gender parity among corporate leadership, and bolstering relationships with institutional investors. In 2016, the Bank of Montreal launched a new mutual fund that tracks the Barclays North American WIL. Though in the 19th and 20th centuries, the bank was involved in slavery, they are making the effort to eliminate inequality in their firm’s culture by combating the risk of modern slavery or human trafficking in their supply chains or in any part of the business.

 

In the Governance aspect, The Barclays PLC Board sets the strategic direction and risk appetite of the Group and is the ultimate decision-making body for matters of Group-wide strategic, financial, regulatory, or reputational significance. The Board is also responsible for the oversight of social and environmental matters, including climate-related risks and opportunities. In 2021, the Board received four updates from the Group Head of Public Policy and Corporate Responsibility and Group Head of Sustainability, covering matters including progress on our climate strategy, policy updates, industry trends, stakeholder engagement, and target-setting. The Board also received regular updates on Public Policy and Corporate Responsibility matters (together with Group Reputation Risk Reports) from the Group Head of Public Policy and Corporate Responsibility. These updates covered matters such as key government and regulatory policy, regulatory engagement, and ESG matters including climate. In addition to these Board briefings, the Group Head of Public Policy and Corporate  Responsibility regularly engaged with the Barclays Group Chief Executive, Chairman, and Non-Executive Directors on a range of matters relating to the Group’s climate strategy.

Who makes it:

1.8

Barclay did a great job in disclosing its sustainability efforts and its commitments, its information is transparent on its website and sustainability reports, and though some goals and net zero plans are not specified with specific metrics to measure, this transparency generally optimizes my overall perception of the bank. Barclay defines net zero operations as the state in which they will achieve a GHG reduction of our Scope 1 and Scope 2 emissions by at least 90% against a 2018 baseline and use carbon removals to eliminate any residual operational emissions we cannot yet abate. 90% reduction sounds like an ambitious goal, but if it’s against the 2018 baseline, their carbon footprint can be significantly reduced by achieving it. They have been carbon neutral for our Scope 110, Scope 211, and Scope 3 business travel12 emissions since 2020. Barclay has achieved this by reducing or eliminating sources of carbon dioxide emissions associated with operations and business travel and compensating for any remaining emissions by purchasing carbon credits under the Verified Carbon Standard (VCS). They reduced our Scope 1 and 2 emissions by 86% since 2018 and we powered 94% of their operations with renewable electricity in 2021. An essential part of their journey to achieve net zero will also be to address GHG emissions associated with the products and services we purchase, and to that end, they have been working over the past few years. The bank aims by 2025 for suppliers covering 70% of addressable spending to be disclosing their GHG emissions and has science-based emission reduction targets in place, and they aim to achieve net zero emissions in our supply chain well in advance of 2050. The projects and initiatives that Barclays take on indicate decent efforts they’ve been putting in with regards to ESG and support of green transition, but to achieve their goals by 2050, the bank needs to keep innovating in their financial products and organizational structure to enforce green initiatives and ESG performances.