Banking Industry Moves Away from Financing Fossil Fuels

In early January, shareholders at Barclays, a British investment bank, filed a resolution to preclude the bank from financing companies in the future that are focused on fossil fuel production. Under the resolution, the bank would phase out its financing of any company that is not aligned with the Paris Climate Agreement.


The Paris Climate Agreement seeks to curtail a rise in global temperatures by reducing global greenhouse gas emissions. The United States exited the agreement in June 2017.

The resolution was introduced by 11 institutional investors of the bank, who collectively manage about $170 billion in assets. In their introduction of the resolution, the investors cited growing concerns about climate change and its financial impacts. The investors and outside groups argue that passage of the resolution would help reduce the bank’s financial risk in the future. If passed, the resolution would be the first of its kind at a European bank.


Bank officials will vote on the resolution at an annual meeting in May. Currently, Barclays ranks as the largest financier of fossil fuel extraction companies and fossil fuel-based utilities in Europe and the sixth-largest worldwide. According to the Rainforest Action Network, Barclays’ lending to fossil fuel companies totaled about $85 billion between 2015 and 2018.

While it is unclear if or how the resolution would impact U.S. companies, the move at Barclays could signal a more troubling trend. Similar climate-focused measures are being introduced by shareholders at major U.S. banks including Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. Currently, JPMorgan Chase is the largest financier of fossil fuel companies globally.


Communities engaged in natural gas and oil production should monitor the resolution at Barclays and other banks closely as passage at any one of the lenders could cut off funding for future development.

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