Climate Action

Barclays shares update on new transparency tools for 2050 net-zero ambition

Barclays Group Chairman Nigel Higgins has released a statement addressing what Barclays has done to help address the climate challenge since setting its 2050 net-zero target.

  • 01 December 2020
  • Madeline Watkiss

Barclays Group Chairman Nigel Higgins has released a statement addressing what Barclays has done to help address the climate challenge since setting its 2050 net-zero target.

The letter details the work Barclays has been undertaking in the 6 months since adopting the target and committing to align all its financing activities with the goals of the Paris Agreement.

The letter states: "We are very grateful for the overwhelming support which you gave Barclays earlier this year when we adopted an ambition to become net-zero by 2050 and a commitment to align all our financing activities with the goals of the Paris Agreement."

"This letter now sets out the work that we have been undertaking in the intervening six months as well as being clear about the work that still needs to be done. The journey is far from complete – and the challenges in the current pandemic have not made it easy to progress the work beyond what we indicated in March – but we have made progress and are committed to continuous improvement in our response to the climate challenge."

Higgins said the bank has consulted stakeholders and specialists to establish the best means for measuring the emissions of its clients that are linked to financing they provide. Barclays preferred approach to reach its goals uses both emissions intensity and absolute emissions measures, depending on the nature of portfolio being measured.

Primarily it expects most portfolios will be measured using emissions intensity, and as the linked emissions of a portfolio reduce, its will start to track an absolute measure.

Barclays have engaged with the Two Degrees Investing Initiative’s Paris Agreement Capital Transition Assessment (PACTA), as well as the Partnership for Carbon Accounting Financials (PCAF).

To keep its promise made in March to align financing in all sectors to the goals of the Paris Agreement, the bank is using the International Energy Agency’s Sustainable Development Scenario as the benchmark for its Energy and Power portfolios, stating it will achieve full alignment in its Power portfolio by 2035.

This means Barclays are on track to reduce by 30% the CO2 intensity of its power portfolio by 2025.

They have set a new goal for the Energy sector and will now target a 15% reduction in absolute emissions by 2025, rather than CO2 intensity. Reflecting the fact the Energy sector cannot so easily reduce its emissions intensity.

Barclays state that although it has made progress, specifically within Power and Energy, it realises there is still more to do. Barclays have also set out to produce a climate dashboard which will track progress against these targets available online which will be refreshed and expanded in line with its annual ESG reporting.

The Bank is due to give another update within the first quarter of 2021, including more information about how Barclays is supporting clients throughout their transition with green financing and capital markets solutions.