Priya Patel
Date: 12 February 2024
Source: OilPrice.com
Title: Barclays looks to avoid greenwashing while financing energy transition
Barclays has released a new “transition finance” framework to avoid greenwashing claims. The framework provides strict guidelines for their transition finance team while lending to support activities that promote greenhouse gas emission reduction in high-emitting and hard-to-abate sectors. As there is no universal consensus on defining “transition” activities, Barclays has developed its own definition. The bank has established transition finance principles for application, which offer robust and scrutinised-only loans and capital market solutions without raising greenwashing concerns. The bank also recently stated that it will no longer provide project finance or other direct finance to energy clients for upstream oil and gas expansion projects or related infrastructure. They will also impose restrictions on new energy clients engaged in expansions of oil and gas. Furthermore, they added restrictions on oil from Amazon and extra heavy-oil. They will require their energy clients to set 2030 methane reduction targets and cease all routine and non-essential venting and flaring by 2030. They will also need to align with net-zero by setting near-term scope one and two targets by January 2026.
Key points:
• Barclays has published its “transition finance” framework to prevent accusations of greenwashing.
• The bank has defined their transition finance under three main criteria.
• Recent claims include that the bank will no longer provide project finance to energy clients.
