Barclays to reject most financing for Arctic drilling

Barclays to reject most financing for Arctic drilling
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U.K.-based international bank Barclays will likely reject opportunities to finance oil and gas drilling in the Arctic as well as other climate change threats, according to a new policy it announced Monday.

In its Energy and Climate Change Statement, the bank said it would be unlikely to finance drilling jobs in Alaska’s Arctic National Wildlife Refuge (ANWR), saying its “particularly fragile and pristine ecosystem” is “central to the livelihoods and culture of local indigenous peoples.”

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“Any client conducting new exploration of or extraction of Arctic oil and gas will be subject to EDD,” known as Enhanced Due Diligence.  “Additionally, Barclays will conduct EDD on any financing transaction directly connected with the exploration or extraction of oil or gas in the Arctic. Under the EDD framework, we would not expect such project finance proposals to meet our criteria,” the policy reads.

The company stopped short of saying it would pull out of all current financing.

Congress passed into law in 2017 a highly controversial mandate to open up ANWR to fossil fuel extraction. Following up on the law, the Interior Department this December released a preliminary plan to lease parcels in the refuge for oil and gas drilling. The plan has met a ton of resistance from land conservationists and environmentalists who fear the effects of the drilling on the local ecosystem and indigenous communities, as well as the effects of extraction on climate change.

Additional promises the bank made include commitments to invest in companies that aim to meet the U.N.’s Intergovernmental Panel on Climate Change (IPCC) warnings to immediately reduce climate emissions as well as the Paris climate agreement.

“Estimates suggest that between $320 [billion] and $480 billion of additional investment will be needed each year to achieve the goals of the Paris Agreement," Barclays wrote. "We are committed to supporting our clients in making the significant financial investments required to mitigate and adapt to climate change, whether financing their investment in efficiency, resilience in their business operations, or helping new markets to evolve and flourish through renewable technologies."

Some environmental groups applauded the bank's efforts to invest in clean energy and reject fossil fuel extraction in fragile areas such as the Arctic.

“Major financial institutions are beginning to stand with the overwhelming majority of Americans and doing what the Trump administration refuses to do: protect the Arctic Refuge,” said Lena Moffitt, senior director of the Sierra Club’s Our Wild America campaign. “Today’s announcement is further proof that drilling in the Arctic Refuge would be a bad bet for any company foolish enough to pursue it.”

However, other environmental groups were critical of Barclay’s new policy, arguing that it didn’t go far enough by failing to mention similar limitations on funding coal and tar sands related extraction projects.

Greenpeace said Barclays’ policy put it “on the wrong side of history.”

“By continuing to fund tar sands pipelines, Barclays is once again choosing short-term profit over human rights and the wishes of a small number of corporate clients over those of tens of thousands of its customers,” the environmental activist group said in a statement.

Barclays is the most recent bank to release new climate change based policies on how it will conduct business with fossil fuel companies. It joins the ranks of HSBC, RBS and Lloyds.