Jupiter Asset Management has become the latest investor to put pressure on Barclays Bank to phase out the provision of financial services to the fossil fuel sector and utilities that are not aligned with the Paris climate goals.
Barclays, which is the "world's sixth largest backer of fossil fuels", with exposure of more than $27bn, according to lobbying charity ShareAction, has now seen a group of 11 institutional investors build a transition plan, including Amundi, EdenTree and the UK's largest pension fund Nest.
Jupiter, which has a 1.2% share in Barclays, is the latest to commit to supporting a shareholder resolution at the bank's 7 May AGM in efforts to force change.
The timelines for phase out must be aligned with the Paris goals"
The resolution reads: "To promote the long-term success of the company, given the risks and opportunities associated with climate change, we as shareholders direct the company to set and disclose targets to phase out the provision of financial services, including but not limited to project finance, corporate finance, and underwriting, to the energy sector…and electric and gas utility companies that are not aligned with…The Paris Agreement".
"The timelines for phase out must be aligned with the Paris goals. The company should report on progress on an annual basis, starting from 2021 onwards."
According to Rainforest Action Network, Barclays has provided more than $85bn of financing to fossil fuel companies and high carbon projects since the Paris Agreement was signed in 2015.
Head of governance and sustainability at Jupiter Ashish Ray said: "As investors, we expect boards and management teams to maintain a long-term mind set and appropriately manage key risks to their business.
"We see the goals of the resolution as entirely consistent with this approach. We fully recognise that key risks, including environmental risks, vary between companies. Nevertheless, there are some issues that extend across most, if not all, companies. Climate change is one of these and is therefore an important focus for Jupiter."
Ray added that Jupiter "firmly supports" the recommendations of the Taskforce for Climate-Related Financial Disclosures, a market-driven initiative calling for climate-related financial risk disclosures in mainstream filings.
Campaign manager at ShareAction Jeanne Martin said: "Barclays' top shareholders are becoming increasingly dissatisfied with the company's close ties with the fossil fuel industry in times of raging wildfires, sweeping heatwaves and catastrophic floods.
"We urge Barclays to listen to its shareholders and commit to phasing out support for the fossil fuel industry and utilities that are not aligned with the Paris climate goals. A good first step for the bank would be to stop pouring millions into the coal and tar sands industries, two of the most carbon-intensive sources of energy on Earth."
Responsible investment analyst at EdenTree IM Esmé van Herwijnen said that the firm will support the resolution at the Barclays AGM in May and will also ask the bank's board of directors to support the motion.
She added: "This all forms a part of a longer, more sustained engagement that EdenTree have had with Barclays over the last year, and indeed our wider engagement strategy on tackling fossil fuel financing in the banking sector."
This article was first published by Investment Week