A new report has accused Barclays of greenwashing after the British bank was said to have helped arrange more than £3 billion in financing for Italian oil giant Eni in a way that helps it qualify for sustainable financing goals.
According to The Guardian, environmental groups have accused Barclays of “publicly misleading” the public for helping Eni expand its oil and gas production by at least a third over the course of four years while simultaneously claiming to be operating a sustainable banking model.
The report notes that Eni’s production is projected to be 35 per cent higher than required to align with net zero emissions targets by 2030, with Barclays helping raise sustainability-linked bonds (SLB) and sustainability-linked loans (SLL) worth €1 billion and €3 billion respectively. The SLB’s structuring also saw involvement from Goldman Sachs and JP Morgan Chase.
Barclays has claimed that the financing qualifies to be counted towards its 2030 sustainability target as the interest rates have been linked to emissions goals, but there is nothing stopping Eni using the funding to contribute to oil and gas project development.
The report notes that environmental groups have been critical of the goals in the contracts which exclude scope 3 emissions – such as those from burning oil and gas. One researcher at Anthropocene Fixed Income Institute told the paper that this is an example of “sustainability-linked financial products that are not effective.”
The UK’s financial watchdog, the Financial Conduct Authority (FCA), has been casting an eye over banks’ green credentials, and last year sent a letter to financial institutions on “the possibility of potential risks to market integrity and suspicion of greenwashing in the context of SLLs”.
Barclays in February said that it would no longer provide direct funding for new oil and gas projects, but the bank has also said that SLBs and SLLs are not considered as direct funding.
In comments to The Guardian, a spokesperson for Eni said: “Eni has built a business model that puts sustainability at the centre of every business activity, including financial strategy.”
FStech has reached out to Barclays for comment.
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