Barclays

RATING

SECTOR

Banking

WEBSITE

CONTACT

1 Churchill Place
London
ENG E14 5HP

Tel: +44 (0) 20 7116 1000
Fax: +44 (0) 20 7116 7665
E-mail: prdmail@boj.or.jp

STOCK EXCHANGE

LISTING

  • Barclays’ MSCI ESG Rating increased to ‘A’ in 2020
  • Barclays scored 23.9 in the Sustainalytics ESG Risk Rating
  • 88th percentile for banks in S&P Global Sustainability index
  • FTSE Russell ESG Rating for 2020 is 4.7/5

EMPLOYEES

80,800

SUSTAINABILITY DIRECTOR

Vicky McAllister

AWARDS

  • 2020 Best ESG Investment Fund: Multi-Asset
  • 2019 ESG report (Climate Disclosure) Award

CONTENT SOURCE

FURTHER READING

Report created by Ellie Weiss

Barclays

SECTIONS :  Sustainability Targets    Evaluation  •  Key Points  •  Overview

 

Company Activity

Barclays is a British multinational investment and financial service bank based out of London, England, and was founded in 1896. 

The bank has four main sectors which consist of personal banking, corporate banking, wealth management, and investment management. 

The bank is made of two divisions: Barclays UK and Barclays International. The UK branch works in retail banking operations, consumer credit cards, wealth management, and corporate banking for small businesses. The international branch works in corporate banking franchise, investment banking, and cards and wealth management outside of the UK.

Barclays traces its origins to the goldsmith banking business established in the City of London in 1690. James Barclay became a partner in the business in 1736. In 1896, several banks in London and the English provinces, including Goslings Bank, Backhouse’s Bank and Gurney’s Bank, united as a joint-stock bank under the name Barclays and Co.

Over the following decades, Barclays expanded to become a nationwide bank. In 1967, Barclays deployed the world’s first cash dispenser. Barclays has made numerous corporate acquisitions, including of London, Provincial and South Western Bank in 1918, British Linen Bank in 1919, Mercantile Credit in 1975, the Woolwich in 2000 and the North American operations of Lehman Brothers in 2008.

Barclays has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on the New York Stock Exchange. It is considered a systemically important bank by the Financial Stability Board.

Company Sustainability Activity

Barclays’ sustainability activities are based on their values of respect, integrity, service, excellence, and stewardship. Their main purpose is to deploy finance responsibly to support individuals and businesses.

Their ESG responsibilities are broken down into five areas, including investing in its communities, people and culture, running a responsible business and managing environmental and social impacts.

Barclays introduced The Board Risk Committee to their climate dashboard in 2020. This is reviewed quarterly and the climate dashboard will be considered a Principal Risk in the Enterprise Risk Management Framework from 2022 onwards. The bank also has an Board Audit Committee monitoring effectiveness of the Group’s internal controls, including those on climate change. 

Barclays is the founding member of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) which is based on four elements: governance, strategy, risk management, and metric targets: Governance, Strategy, Risk Management and Metric Targets.

Barclays is also dedicated to green finance, implementing Green and Sustainability Bonds, Sustainable Impact Banking and a Low-carbon economy in which Barclays has facilitated £15 billion for green financing to accelerate the transition to a low-carbon economy. Barclays also launched BlueTrack in 2020,  a methodology to embed climate impact into financing decisions, helping reshape their portfolio within their ‘carbon limit’, consider the breakdown of the fuel mix in addition to carbon limits, and promote transitioning from carbon-intensive sources of energy.

 

Highlights

  • Supports green finance by underwriting sustainability bonds, sustainable impact banking practices, financially supporting the transition to a low-carbon economy, and through their BlueTrack methodology to incorporate climate concerns into their portfolio
  • Making their supply chain more sustainable by calculating the total emissions, through their Supplier Code of Conduct, and their diversity and inclusivity initiatives
  • Supports a sustainable economy with green home mortgages, sustainable investing solutions, sustainable impact capital initiatives, and green and sustainable capital markets 
  • Fights deforestation by supporting projects that are helping to end natural forest loss and help corporations in the forestry sector to achieve net-zero deforestation
  • Support human rights by aligning their work with human rights bills and participating in initiatives to give the financial service access to modern slavery and human trafficking survivors
  • Works to offset their carbon from travel by purchasing carbon credits and working on projects to enhance soil carbon levels
  • Recycling 100% of paper used in facilities and aim to reduce packaging from supplier 
  • Growing sustainable and pesticide-free food in their fully automated vertical farm system 
  • Making their business more responsible by teaching financial wellbeing to employees and customers, fighting financial abuse, supporting those who are vulnerable and/or suffering from mental health problems, and committing to transparent public policy engagement
  • Supporting their employees through a virtual development program, diversity network, and employee benefits
  • Investing in communities with their Unreasonable Impact initiative and placing people in jobs with their Connect with Work project

Targets

  • Target for financing £100bn for green financing products and services to accelerate the transition to a low-carbon economy
  • 90% of electricity needs to come from renewable energy by the end of 2021
  • Reduce energy portfolio emissions by 15% by 2025, and continue to track their benchmark reduction on an ongoing basis
  • Reduce power portfolio emissions intensity by 30% by 2025, on the way to alignment with the 2035 benchmark
  • Ensure at least 30% of global oceans are effectively protected and the other 70% are sustainably managed by 2030 by partnering with the Blue Marine Foundation
  • Divert all waste from landfills and incineration across all campuses by 2035, with 100% of it being reused, repurposed, or recycled, all through the Zero Waste Strategy commencing in 2021 on the Glasgow campus
  • Reduce energy intensity by 7% by 2035
  • Reduce, reuse, and capture all non-drinking water throughout the campus portfolio by 2035.
  • Be net-zero by 2050 across all direct and indirect emissions
  • Align all financing activities with the Paris Agreement

Progress

2020 Governance progress

  • Furthered information on the Board’s approach to overseeing social and environmental matters, including their approach to climate change
  • New role in the Group Head of Public Policy for leading Barclay’s efforts in tackling climate change
  • The Chief Risk Officer maintained responsibility for climate-related financial risk under the Senior Management Regime

2020 Strategy progress

  • Ran a climate internal stress test, furthering their understanding of climate risks

2020 Risk management progress

  • Each Principal Risk implemented the Climate Change Financial and Operational Risk Policy and the PRA Supervisory Statement on financial risks of climate change
  • Role of Head of Climate Risk created to develop climate risk methodologies and manage climate risk in their portfolio
  • Their due diligence approach now includes clients in the additional energy sub-sectors that are in the scope of their Climate Change Statement

2020 Metrics and targets progress

  • Progress in Paris Agreement targets for their Energy and Power portfolios
  • Disclosure of 2020 and 2019 figures

Progress in ‘Supporting a Sustainable and Inclusive Economy’

  • Facilitated £60.9bn of sustainability-related financing in 2020, compared to £34.8bn in 2019
  • £124.2bn out of £150bn its social and environmental financing target by 2025
  • £32.4bn out of £100bn of its green financing target by 2030
  • £3.1bn in 2020, compared to £2.7bn in 2019 and £2.3bn in 2018 went towards treasury green bond holding

Progress towards ‘Managing Environmental and Social Impacts’

  • 912 transactions subjected to environmental and social risk review
  • Reduced carbon emissions in scope 1 and 2 by 71%
  • 88% prompt payment to suppliers against 85% commitment

Progress towards ‘Running a Responsible Business’

  • Barclays UK net promoter score (NPE) went up by 15 in 2020
  • 32% reduction in UK complaints excluding PPI
  • £2113 mn taxes paid globally

Progress towards ‘Our People and Culture’

  • 87% of employees said they would recommend Barclays as a good place to work
  • Females at managing director and director level at 26%, up 2% since 2018
  • 13 average training hours per annum per employee

Progress in ‘Investing in our Communities’

  • LifeSkills: 2.33 mn people upskilled in 2019 
  • Connect with Work: 49,700 people placed into work
  • 163 Unreasonable Impact ventures supported since 2016
  • 3 pilot schemes have launched since the start of the Thriving Local Economies Programme

Environmental and social impacts progress

  • Total emissions dropped from 181,400 tonnes of CO2 in 2019 to 102,100
  • Carbon emissions intensity dropped from 4.25 tonnes of CO2 in 2018 to 0.49 in 2019 and back up to 1.23 in 2020
  • Water consumption dropped from 1,225,000 cubic meters in 2019 to 809,000 in 2020
  • Waste dropped from 10,465 tonnes in 2019 to 5167 in 2020
  • Energy consumption dropped from 679,311,000 kWh in 2019 to 621,695,000 in 2020
  • 71% reduction in carbon emissions since 2018, through the purchase of renewable energy contracts across operations in the UK and continental Europe
  • 74% of electricity needs came from renewable energy sources

Supply chain sustainability

  • Carbon Disclosure Project: Barclays works with the project to calculate supply chain emissions from the top 125 suppliers
  • Supplier Code of Conduct: Requires their suppliers to be actively minimizing the impact on the environment, deploying measures to prevent and reduce environmental harm, tracking and reporting performance, and setting targets and commitments
  • Global Supplier Diversity and Inclusions Initiative: in 2020, 8% of its global addressable spend was placed with small and medium-sized enterprises, female-owned businesses, ethnic minorities, LGBT, veterans, service-disabled veterans, or individuals with disabilities

Supporting a sustainable and inclusive economy

  • Green Home Mortgages: offers lower interest rates for new properties meeting minimum energy efficiency requirements
  • Sustainable Investing Solutions: dedicated sustainable products such as Sustainable Discretionary Strategies and Barclays Multi-Impact Growth Fund
  • Sustainable Impact Capital Initiative: £1.75 mn in principal equity investments
  • Sustainable Product Group: focuses on renewables, green products, and sustainability-linked loans
  • Sustainable and Impact Banking Group: supported ESG integration for corporate and investor clients
  • Green and Sustainable Capital Markets: organization, structuring, and execution of Green, Social, and Sustainability Debt products for global clients including governments, public sector, corporates, and financial institutions

Managing environmental and social impacts

  • Deforestation and soft commodities: Barclays is a signatory to the New York Forest Declaration of the United Nations, to help cut natural forest loss in half by 2020, and end it by 2030
  • The bank is also a founding member of the Banking Environment Initiative’s Soft Commodities Compact, helping corporate clients in sectors such as forestry, pulp & paper, and palm oil, to achieve zero net deforestation
  • Human rights and modern slavery: Barclays operates in accordance with the International Bill of Human Rights and UN Guiding Principles on Business and Human Rights to promote human rights in employment policies
  • They also have added questions to their client due diligence on local community engagement as well as respect for Indigenous Peoples’ rights
  • In addition, the bank participates in the Finance Against Slavery and Trafficking initiative, improving access to financial services for survivors of modern slavery and human trafficking
  • Carbon offsetting of residual emissions: They offset their business travel with the purchase of verified carbon credits from a range of projects
  • Environmental management initiatives: With their Zero Waste Supply Chain Charter, they aim to reduce packaging from suppliers as well as recycle 100% of paper used in their facilities 
  • Environmental property policy and environment standard: 16 of their buildings are certified to ISO 14001, there are 33 construction projects recognized with LEED or BREEAM accreditation, and their Piscataway Data Centre has an Energy Star rating
  • Sustainable Farming: Their 80 Acre Farm in Hamilton, Ohio works to grow pesticide-free food. This fully automated vertical farm system uses 97% less water than regular farms with 300 times the yield

Running a responsible business

  • Building financial wellbeing: Provides knowledge and expertise through their colleagues to their customers, with digital platforms via Digital Eagles, or educating them on basic money management via their Money Mentors program, LifeSkills program, and Barclays Money Management Hub
  • Financial Abuse: Uses web content, social media, and branch screens to support the Government’s #YouAreNotALone campaign against domestic and financial abuse
  • Vulnerability and mental health: Partnered with Mind (a leading mental health charity) to develop a program to support people with mental health problems
  • Homelessness: In Oc. 2020, Barclays became the first high street bank to launch a trial in partnership with ProxyAddress to address the financial exclusion of vulnerable people
  • Public policy engagement: Committed to being transparent through its website. They publish material responses to public policy consultations, agencies they work with, and key trade association members

Employee wellbeing

  • Developing talent for the future: Barclays invested £23m in virtual development content in 2020 for training employees
  • Their diversity network has over 23,000 employees taking part, providing support for disabilities, gender, LGBT+, multicultural, and multigenerational related topics
  • Employee Benefits: Comprehensive rewards package, competitive salary, annual bonus, pension, private healthcare, life assurance, holiday entitlement, maternity, adoption, and paternity leave

Community investment

  • Unreasonable Impact: through this initiative, Barclays supports SOURCE Global, whose mission is to make drinking water an unlimited resource using thermodynamics, materials science, and control technology
  • Connect with Work initiative: they have placed 47,000 people in jobs globally by engaging with 1193 businesses

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 1: No Poverty

  • Through their Connect With Work program, they have placed 49,700 in occupations 
  • Waived £100m UK overdraft and interest fees for COVID-19 relief
  • Granted 680,000 payment holidays to support customers during the pandemic
  • As part of their £100m COVID-19 Community Aid Package, they have supported more than 250 charities globally and provided over 9 million meals to vulnerable communities across the US through their partnership with Feeding America
  • Provide knowledge and expertise to customers, with digital platforms via Digital Eagles, or educating them on basic money management via our Money Mentors, LikeSkills program, and Barclays Money Management Hub.
  • In Oct. 2020 Barclays became the first high street bank to launch a trial in partnership with ProxyAddress to address the financial exclusion of vulnerable people

SDG 3: Good Health and Well-being

  • Distributed over 65,000 hygiene kits to people across the Asia Pacific and supported over 13,000 UK NHS hospitals to meet immediate and urgent needs as part of their COVID-19 Community Aid Package
  • Grow pesticide-free food at their 80 Acres Farm
  • Provide their employees with benefits including private healthcare, life assurance, and maternity, paternity, and adoption leave
  • Through their Unreasonable Impact initiatives, they partner with SOURCE Global who works to make drinking water an unlimited resource using thermodynamics, materials science, and control technology
  • Charity partnership with Mind (a leading mental health charity): developing a program to support people with mental health problems

SDG 4: Quality Education

  • With their LifeSkills program, they upskilled 2.33 million people in 2019
  • Provide knowledge and expertise through their colleagues to help customers, with digital platforms via Digital Eagles, or educating them on basic money management via Money Mentors, LikeSkills program, and Barclays Money Management Hub

SDG 7: Affordable and Clean Energy

  • Within their BlueTrack initiative, they derived benchmarks according to the International Energy Agency’s Sustainable Development Scenario (SDS)
  • 74% of their electricity needs come from renewable energy and are on track to hit their RE100 target of 90% by the end of 2021
  • Through their Green Home Mortgages, they offer lower interest rates for new build properties meeting minimum energy efficiency requirements
  • Their Sustainable Product Group focuses on renewables, green products, and sustainability-linked loans

SDG 9: Industry, Innovation and Infrastructure

  • Launched 3 pilot schemes since the start of the Thriving Local Economies Programme
  • Implementing new tools to assess future implications of climate change pathways of an organization
  • Investing £100 bn in green financing to accelerate the transition to a low-carbon economy

SDG 10: Reduced Inequalities

SDG 16: Peace, Justice and Strong Institutions

  • Committed to being transparent through their website, publishing material responses to public policy consultations, agencies they work with, and key trade association members

SDG 17: Partnerships for the GoalsMind

  • Partner with Unreasonable Impact program: 80 Acres Farms can continue to meet demands
  • Provided over 9 million meals to vulnerable communities across the US through their partnership with Feeding America
  • Partnering with the Blue Marine Foundation (BLUE) to help ensure at least 30% of global oceans are effectively protected and the other 70% are sustainably managed by 2030
 

Evaluation

Barclays has a wide range of activities that support sustainable development. They have initiatives and projects that focus on the environment, societal needs, and economic development and have multiple dedicated roles to sustainability oversight.

The bank works to make its supply chain sustainable, supports its employees and customers, and gives back to the community. It is dedicated to transparency by periodically communicating with the public and publishing extensive reports. 

The bank has multiple awards, listings, and certifications that legitimize its work. They also report extensive past progress as well as targets for the future. 

Barclays aligns themselves with a handful of SDGs; however, they also admit to directly causing more negative effects on some SDGs than positive ones. They report that they positively impact SDGs 1,3,4,7,9,10,16,17 while having negative impacts on SDGs 12,13,14,15. 

Concerningly, Barclays has been named the Worst Bank in Europe in regards to fossil fuel investment invested a total of $144.897 B in the industry since 2016. Their fracking practices have been devastating land in Argentina and directly impacting the lives of the Mapuche indigenous communities, in addition to the plants and animals in the area. The bank has decreased its investment in fossil fuels from 2019 to 2020.

Barclays has been rated a C.

Analyst Outlook: Neutral

Barclays currently has many initiatives that help make their business more sustainable. They have made progress and have set up clear goals to improve their practices. They have made steps towards decreasing their investment in fossil fuels.

Barclays could receive a higher rating if it continues to divest in the fossil fuel industry.

Key Points

  • Admit to having practices that actively negatively impact the climate, resource efficiency and security, and biodiversity and ecosystems (SDGs 12,13,14,15)
  • Awarded the Worst Bank in Europe in regards to fossil fuel investment
    • $14.83 bn in offshore oil & gas financing since 2016
    • $23.99 billion in fracking financing since 2016
    • Fracking in Vaca Muerta where indigenous Mapuche communities live 
      • The areas are being devastated and the land, people, and animals are all suffering on a daily basis
  • Supports green financing for the transition to a low-carbon economy
  • Sustainable supply chain through code of conduct and calculating emissions
  • Supporting zero net deforestation projects
  • Taking part in modern slavery and human trafficking focused initiatives and bills
  • Offsetting carbon from travel
  • Recycle 100% of paper used in facilities and aim to reduce packaging from suppliers
  • Grow sustainable and pesticide-free food in their fully automated vertical farm system 
  • Teaching financial wellbeing to employees and customers
  • Committing to transparent public policy engagement
  • Support their employees through development programs, diversity networks, and benefits
  • Unreasonable Impact initiative and Connect with Work projects help support the community
 
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