Barclays Plc has issued internal guidance to its staff regarding its continued membership in the Net-Zero Banking Alliance (NZBA) following the departure of several major US banks. The memo, obtained by Bloomberg, instructs employees to avoid unsolicited discussions on the topic but provides talking points for client inquiries. This development highlights the transatlantic impact of the US banking sector’s withdrawal from the climate alliance.
While European banks like ING Groep NV, Deutsche Bank AG, and Standard Chartered Plc have reaffirmed their commitment to NZBA, Barclays has adopted a more cautious approach. The memo reiterates the bank’s commitment to net-zero emissions but states that its participation in external groups is subject to change based on its evolving strategy and advocacy positions. Barclays’ continued involvement in NZBA will depend on these factors. A spokesperson for Barclays declined to comment on the memo.
The exodus of US banks from NZBA began in December with Goldman Sachs Group Inc., followed by Wells Fargo & Co., Citigroup Inc., Bank of America Corp., Morgan Stanley, and JPMorgan Chase & Co. BlackRock Inc. also exited the Net Zero Asset Managers initiative (NZAM), a similar alliance for investment firms. NZAM has since initiated a review to ensure its continued relevance. These departures coincide with escalating criticism from the Republican Party against what it terms “woke” capitalism. Following the US banks’ withdrawal from NZBA, Texas Attorney General Ken Paxton rescinded his threat to bar them from municipal-bond transactions.
European banks, facing stricter climate regulations than their US counterparts, have largely affirmed their dedication to the alliance. Standard Chartered, for instance, explicitly stated its intention to remain in NZBA after Morgan Stanley’s announcement.
Barclays’ memo emphasizes its commitment to supporting clients through the net-zero transition by financing low-carbon solutions and climate technologies. Simultaneously, the bank will continue financing existing oil, gas, and power sector clients to ensure energy security and reliability. This balanced approach reflects the complexities of the energy transition. In 2024, Barclays established an energy transition team within its corporate and investment bank to capitalize on the anticipated shift away from fossil fuels.
Despite these efforts, Barclays remains a frequent target of climate activists due to its continued financing of fossil fuel projects. While its fossil fuel financing lags behind Canadian, US, and Japanese banks, it surpasses that of its European peers, according to Bloomberg data.
NZBA requires member banks to align their financed emissions with pathways to net-zero by 2050, set interim 2030 targets, and report on their progress. While exiting banks maintain their commitment to decarbonization, they prioritize serving their clients’ needs.
Barclays highlights its 2020 commitment to net-zero emissions, predating NZBA’s formation. The bank reaffirms its alignment with the Paris climate accord’s goals and timelines. CEO C.S. Venkatakrishnan continues to chair the Financial Services Task Force of the Sustainable Markets Initiative, a private sector group focused on the energy transition. This continued leadership underscores Barclays’ ongoing engagement with climate-related initiatives.
The memo was circulated internally last week by Barclays’ sustainability team, now led by Daniel Hanna, who succeeded Laura Barlow. Hanna will combine his new role with his existing responsibilities as head of sustainable and transition finance. Barlow remains a senior advisor to the bank. This leadership transition signals a potential shift in Barclays’ sustainability strategy.
In conclusion, Barclays is navigating a complex landscape as it balances its commitment to net-zero emissions with the evolving political and regulatory environment surrounding climate finance. The bank’s future involvement in NZBA remains contingent on its strategic direction and advocacy positions, reflecting a more nuanced approach compared to its European counterparts.
