Barclays follows HSBC in ditching net zero banks club
Barclays has become the second London-based bank to exit the net zero banks club as the financial services industry continues to row back on climate policies.
The FTSE 100 giant – which recorded a £1bn profit jump for the second quarter – said on Friday the UN-convened Net Zero Banking Alliance (NZBA) “no longer has the membership to support our transition”.
This follows Europe’s biggest lender HSBC exiting the alliance last month and an exodus of Wall Street’s banking giants.
Members had faced pressure following the return of President Donald Trump to the White House as the new US administration culled environment, social and governance (ESG) policies along with diversity, equality and inclusion (DEI) endeavours.
Barclays said it retained its ambition to become a net zero bank by 2050 as well as its goal to mobilise $1tn in sustainable and transition finance by 2030.
The bank, along with Natwest, removed climate targets from executive bonuses earlier this year, which was seen as part of the wider reform into pro-environmental measures that companies had baked into their processes
A NZBA spokespersin said: “NZBA remains focused on delivering on the future vision overwhelmingly endorsed by member banks a few months ago.
“It is supporting its members to lead on climate by addressing the barriers preventing their clients from investing in the net-zero transition. As the largest global initiative specifically focused on supporting climate mitigation action by banks, NZBA is uniquely positioned to provide the practical support banks need to grasp the opportunities and manage the risks of the move to net zero.”
Trump effect spreads globally
Morning Wire reported earlier this year over half of UK senior financial professionals believe their leadership will place less focus on ESG policies in the coming years.
Trump’s war on DEI and ESG has sent ripple effects through the financial services industry.
One of the President’s first executive orders upon returning to governance included the removal of the US from the Paris climate agreement
Regulators in the London have also softened approaches in the realm.
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) said in March after a “broad range” of feedback and “expected legislative developments” from the government, they would abort their push to regulate DEI.
This included shelving plans to “name and shame” companies facing investigations, which came under fire from the Square Mile, as well as Westminster.
Aside from the UK and US, five of Canada’s six largest banks, including BMO, TD, CIBC, Scotiabank and National Bank, announced they would leave the climate group at the beginning of this year.
Australia’s Macquarie and Japan’s Sumitomo Mitsui have also announced exits this year.