Jupiter calls on Barclays to phase out fossil fuel funding

FTSE 100 bank has funnelled more than £66bn to fossil fuel companies and high-carbon projects since Paris Agreement

Jupiter Asset Management has joined a growing group of investors, including other asset managers Amundi and Edentree, calling on Barclays to cease funding fossil fuel companies and high-carbon projects.

Jupiter, which holds 1.15% of Barclays’ shares, putting it among the bank’s top 25 shareholders, has has joined 11 other institutional investors and more than 100 individual shareholders that have agreed to vote for a shareholder resolution, filed by campaign group Shareaction.

The resolution, to be presented at the Barclays AGM on 7 May, asks the bank to gradually phase out the provision of financial services to the fossil fuel sector and utilities that are not aligned with the Paris climate goals.

Barclays has provided £66bn of finance to controversial companies

Shareaction’s resolution document cites a Rainforest Action Network survey which shows since the Paris Agreement was signed in 2015, Barclays has provided more than $85bn (£66bn) of finance to fossil fuel companies and high-carbon projects such as tar sands and Arctic oil and gas.

It said this makes the bank the world’s sixth-largest backer of fossil fuels and constitutes the highest level of fossil fuel financing of any European bank, exceeding its peers by more than $27bn.

The resolution document said the bank’s European peers, including HSBC, Standard Chartered, ING, Credit Agricole and BNP Paribas, have already started taking more ambitious steps to align their energy financing with the Paris goals.

A Barclays spokesperson said: “We continue to engage with Shareaction and other shareholders on this issue and will make a further statement at the appropriate time.”

Asset managers on board with resolution  

Jupiter joins Europe’s largest asset manager Amundi as well as Edentree Investment Management in backing the resolution.

Jupiter Asset Management head of governance and sustainability Ashish Ray said: “As investors, we expect boards and management teams to maintain a long-term mindset and appropriately manage key risks to their business. We see the goals of the resolution as entirely consistent with this approach.

“We fully recognise that key risks, including environmental risks, vary between companies. Nevertheless, there are some issues that extend across most, if not all, companies. Climate change is one of these and is therefore an important focus for Jupiter.”

Edentree Investment Management responsible investment analyst Esmé van Herwijnen told ESG Clarity‘s sister title Portfolio Adviser the firm has lent its “full support” to the shareholder resolution.

“We will back the resolution at the Barclays AGM in May, and have written to the bank telling them that we will indeed vote in favour of the resolution, while also asking that the board of directors support this motion as well.

“This all forms a part of a longer, more sustained engagement that Edentree have had with Barclays over the last year, and indeed our wider engagement strategy on tackling fossil fuel financing in the banking sector.”

Large institutional asset owner backing  

In addition, the UK’s largest pension fund by members, the National Employment Savings Trust (Nest), has committed to the resolution, as have the Church Commissioners and the Church of England Pensions Board.

The 11 institutional investors who co-filed the resolution are Arcus Foundation, As You Sow, Brunel Pension Partnership, the Central Board of the Methodist Church, Falkirk Council Pension Fund, Folksam, Jesuits in Britain, Lankelly Chase, LGPS Central, Merseyside Pension Fund, and Sarasin & Partners.

Shareaction campaign manager Jeanne Martin said: “Barclays’ top shareholders are becoming increasingly dissatisfied with the company’s close ties with the fossil fuel industry in times of raging wildfires, sweeping heatwaves and catastrophic floods. We urge Barclays to listen to its shareholders and commit to phasing out support for the fossil fuel industry and utilities that are not aligned with the Paris climate goals.”

This article first appeared on Portfolio Adviser.


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...