New analysis by responsible investment NGO ShareAction has found that loopholes in Barclays’ recently updated energy policy allow it to continue providing a significant amount of finance for fracking, despite the net zero commitment it set in 2020.

The bank amended its energy policy in February, following negotiations with ShareAction and Barclays shareholders, pledging to no longer directly finance new oil and gas projects and to restrict its financing of 'pureplay' companies that focus exclusively on fossil fuel extraction and exploration. However, pureplay companies working on short-term extraction projects are exempted from this commitment, and fracking activities are typically short-term.

ShareAction analysed Barclays’ financing to oil and gas companies to assess the impact of its new restrictions and found they are unlikely to meaningfully address the bank’s role as Europe’s largest financier of fracking.

• A third (34%) of Barclays' financing during 2016-2022 to upstream oil and gas companies was to pureplay fossil fuel extraction and/or exploration companies.
• The volume of Barclays’ financing to pureplay companies has been generally declining since 2016. However, the analysis shows that proportionally the majority of this financing - on average 57% - goes to companies specialising in fracking.
• This rises to 80%, or US$902 million, in 2022, the latest year for which figures are available.

Barclays has also committed to restrict financing for fracking in the UK and Europe. However, fracking is mostly banned or suspended in these regions, while the bank’s fracking client base is largely located in the US.

Kelly Shields, Campaign Manager at ShareAction, said: “Barclays’ energy policy contains loopholes that allow the bank to continue to financially support fracking – a risky activity that contributes to climate change and can destroy habitats and contaminate water supplies.

“Barclays’ stance on fracking leaves it out of step with other large banks that have listened to the concerns of investors and customers and started taking steps to cut off support for this fossil fuel.

“We’re calling on Barclays’ shareholders to ask the bank to close these loopholes and rule out financing for all pureplay oil and gas companies, including fracking clients, wherever they are in the world.”

Katharina Lindmeier, Senior Responsible Investment Manager at Nest, said: “We have been clear that we think Barclays can and should go further on their climate commitments, particularly in strengthening its fracking policy.

“While reading this new analysis from ShareAction was disappointing, we will continue working with Barclays over the coming years to help develop their policy, with fracking a key area of engagement.”

According to Banking on Climate Chaos, Barclays is Europe’s number one financier of fracking and the eighth largest globally. Many of Barclays’ peers such as HSBC and BNP Paribas have applied restrictions to financing for fracking in North America as well as the UK and Europe. BNP Paribas committed to cease financing for fracking in 2017.

Over a third of UK adults surveyed by YouGov last summer said they would be likely to change banks if they discovered their bank was investing in companies that use large quantities of fossil fuels. ShareAction is encouraging the public to sign an open letter calling on Barclays to close the loophole in its energy policy.

Sign the petition to ask Barclays to close their policy loophole and stop financing fracking here.

Notes to editors

Please contact the ShareAction press office if you’d like to speak to a researcher about the analysis or to see a copy of the full dataset: press@shareaction.org or +44 20 7183 4184.

A summary of the new analysis is in this briefing: https://shareaction.org/reports/shareaction-analysisof-barclays-financing-of-purelay-upstream-oil-gas

Methodology: Data was sourced from Banking on Climate Chaos (2016-2022) and the Global Oil & Gas Exit (GOGEL) list and analysed by ShareAction.

Barclays’ financing to companies involved in upstream oil and gas has decreased significantly since 2016, with a steep decrease from US$17.6 billion in 2020 to US$2.4 billion in 2022. This trend, however, needs to be assessed with care due to the volatility of fossil fuel financing volumes during the COVID-19 pandemic (where fossil fuel companies needed extra financial support) and subsequent energy crisis (where fossil fuel companies were flooded with cash). Barclays' financing to pureplay upstream companies has also been on the decline since 2016, but it has reduced at a slower pace than its financing of upstream oil and gas companies between 2020 and 2022 (from US$2.2 billion in 2020 to US$1.1 billion in 2022, a 48% decrease) and its financing to those specialising in fracking has remained fairly constant (US$842 million in 2020 and US$902 million in 2022).

The Banking Standards team at ShareAction partners with asset managers, asset owners, NGOs, retail investors and representatives of affected communities to demand Europe’s largest banks phase out financing to polluting activities and increase the flow of capital into low-carbon alternatives.

ShareAction is an NGO working to shape a world where the financial system serves our planet and its people. It mobilises global investors to use their influence to drive up labour standards, tackle climate change, protect the natural world, and improve people’s health. ShareAction pushes policymakers to ensure the financial system is working in the best interests of society, while working with people to create a movement for change. Visit shareaction.org or follow @ShareAction to find out more.