Barclays, StanChart Face Investor Pressure to Fund Clean Power

SLOUGH, ENGLAND - NOVEMBER 02: A plumbing engineer installs the pipework and water tank for a heat pump system at the Octopus Energy training facility on November 02, 2021 in Slough, England. Ahead of COP26, the UK government announced plans to offer grants to help households install air-source heat pumps over the next three years, encouraging them to ditch their gas and oil-fired boilers. Photo by Leon Neal /Photographer: Leon Neal/Getty Im

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(Bloomberg) — As UK politicians of all stripes push back on the feasibility of racing toward a low-carbon future, investors in the country’s biggest banks refuse to lose sight of that goal.

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A group of 31 shareholders in Barclays Plc overseeing a combined £1.36 trillion ($1.82 trillion) in assets will use the bank’s annual general meeting on Wednesday to call on the board to set an explicit funding target for the renewable energy sector. On Thursday, an investor coalition will ask Standard Chartered Plc to step up capital allocations to clean energy in emerging economies. And last week, a group of HSBC Holdings Plc shareholders urged Europe’s biggest bank to reaffirm its commitment to net zero.

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The UK has, under successive governments, pitched itself as a climate leader, and the current administration under Prime Minister Keir Starmer is no exception. Yet the economic sense of pursuing net zero policies is being increasingly challenged in Britain, with the conservative opposition arguing that a significant expansion in renewable energy, a phaseout of petrol cars and the replacement of gas boilers with heat pumps will raise costs for households. 

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For financial firms, the political mood is critical in setting corporate priorities. The concept of net zero finance has faced more resistance than ever since Donald Trump’s return to the White House, sending ripples throughout the global economy. A lasting legacy of UK climate policy, however, remains its ability as host of the 2021 United Nations summit in Glasgow — COP26 — to get the world’s biggest banks and asset managers to agree to cut their financed emissions.

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In the run-up to COP26, UK banks committed to eliminate financed emissions by 2050 and to channel hundreds of billions of pounds into companies supporting the low-carbon transition. Barclays, for example, has a target to facilitate $1 trillion of sustainable and transition financing between 2023 and the end of 2030, and said earlier this year it has delivered $162.2 billion toward that goal. 

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On Wednesday, Barclays will come under pressure to publish a more detailed methodology, as a representative for ShareAction asks the bank to explain “exactly how it has quantified its sustainable finance targets,” according to the London-based nonprofit, which will be speaking on behalf of a group of investors that includes AkademikerPension, Church of England Pensions Board and Rathbones Group. The shareholders will also request that Barclays set a specific target for the renewable power sector.

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At StanChart’s AGM on Thursday, investors will make the case that the bank could have “an outsized impact” on helping lower the cost of capital for clean technologies in emerging economies, given its large exposure and deep relationships in those markets.

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A spokesperson for StanChart said sustainability is a “clear strategic focus,” which is reinforced by the bank’s net zero financed emissions commitment, in an emailed comment. A spokesperson for Barclays declined to comment. 

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At its AGM on Friday, HSBC Chief Executive Officer Georges Elhedery said the bank remains committed to net zero.

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