Case study: How Barclays works with its clients and customers to encourage sustainable practices

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

Barclays aims to generate sustainable value for all those it serves throughout the economic cycle. It considers its core stakeholders to include four groups: customers and clients, colleagues, society, and investors. Information regarding how Barclays engages with its stakeholders can be found in the ‘Our stakeholders’ section of the Barclays PLC Annual Report 2023.

Barclays seeks to understand the ESG issues that are significant for its stakeholders, including customers and clients, colleagues, society, and investors. To achieve this, Barclays conducts an annual materiality assessment. The materiality matrix is available in the Barclays PLC GRI Report 2023 on the Barclays ESG Resource Hub.

Human Rights saliency assessment for Corporate and Investment Bank (CIB)

In assessing the salience of human rights within the Corporate and Investment Bank (CIB), Barclays collaborated with Shift, a non-profit organization recognized for its expertise in business and human rights. This involved gathering diverse perspectives through engagement with both internal and external stakeholders in order to identify the most significant human rights risks related to the CIB financing portfolio.

Barclays acknowledges that engagement, including with credible representatives of affected stakeholders, is crucial for enhancing its understanding of actual and potential human rights risks, as well as strengthening the robustness and legitimacy of the assessment process.

In external engagement efforts, Barclays consulted with 10 civil society organizations (CSOs) selected based on their previous interactions with the bank regarding human rights issues and/or their recognized expertise in the intersection of financial institutions and human rights.

These discussions were primarily facilitated by Shift and comprised a series of focused dialogues.

Internally, Barclays conducted a series of workshops with colleagues from various functions, including Sustainability, Risk, Compliance, Legal, and business units across the US, UK, and APAC. This was followed by in-depth interviews with some of these team members.

The insights gathered during this proactive engagement, along with findings from prior interactions with CSOs and desk-based research conducted by the Barclays Social Policy team and Shift, contributed to the identification of a comprehensive list of human rights impacts.

These impacts were then prioritized by considering their relative severity on individuals and their likelihood of occurrence, resulting in a shortlist. This list and the accompanying analysis were presented to core stakeholders for review, which helped finalize Barclays’ five salient human rights issues, as outlined on page 240 of the Barclays PLC Annual Report 2023.

Engaging with industry

In terms of industry engagement, Barclays recognizes that leveraging its relationships with stakeholders can assist in achieving shared objectives.

Ongoing engagement within the financial sector, as well as in other areas of the real economy and public sector, will be vital to implementing the necessary actions to meet Barclays’ global sustainability goals. At a minimum, strategic partnerships with key stakeholders foster knowledge sharing and facilitate informed decision-making. Collaborating with NGOs, academic institutions, government agencies, private sector peers, and local communities enhances Barclays’ capability to understand, evaluate, and address complex issues related to climate change. These partnerships have the potential to reveal opportunities for investment in areas facing financing gaps and scale companies to disrupt markets and innovate for impact.

Information regarding Barclays’ engagement on various strategic initiatives can be found on pages 126-128 of the Barclays PLC Annual Report 2023.

How did Barclays work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2023 PRB Reporting and Self-Assessment Template Barclays reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

Client Transition Framework (CTF)

The CTF, initially piloted in 2022, aids Barclays in evaluating corporate clients’ current and anticipated future progress as they transition to a low-carbon business model.

In 2023, Barclays enhanced the CTF based on recommendations from an external review of the pilot program. The ongoing development of the CTF draws on climate expertise from across the bank and is informed by the evolving landscape, as well as guidance from third-party frameworks and other industry initiatives.

CTF assessments are increasingly utilized to inform decision-making within Barclays, including client engagement, financing restrictions, and capital allocation.

In 2023, Barclays expanded the application of CTF scores to support its broader climate strategy. The CTF guides engagement with clients and aids in identifying and managing transition risks within its financing portfolios.

Barclays believes that the greatest impact can be achieved by supporting clients in their transition to a low-carbon business model, rather than merely withdrawing support. This is especially relevant for clients in highly carbon-intensive sectors.

In 2023, Barclays initiated climate-specific engagement for clients with CTF scores of T4 and T5, facilitated by a newly established Client Transition Review Forum (CTRF).

Additionally, Barclays has begun to leverage the results from the CTF assessments to drive engagements with higher-scoring clients, facilitating discussions about their transition plans and providing insights, such as how they compare to their peers.

Working with Clients

Barclays aims to stand alongside its clients as they transition their businesses to operate within a low-carbon economy. The bank is expanding its sustainable finance offerings through specialized teams to assist clients during this period of significant change.

Barclays views the transition to a low-carbon economy as a defining opportunity for innovation and growth, believing that it can make the most substantial difference by supporting and engaging with clients during their transition, utilizing its advisory and financial expertise to help them navigate this period of extraordinary change.

As trusted advisers, Barclays continues to proactively engage with clients on the risks and opportunities emerging from the transition to a low-carbon economy. This engagement includes collaboration with climate technology companies at various stages of development, as well as with larger, established and/or higher-intensity clients on their transition journeys.

Barclays supports clients in executing their climate strategies, which includes facilitating initial public offerings for climate-focused growth companies, assisting in the acquisition of emerging climate technology start-ups to diversify incumbent clients’ business models, and providing financing to enable the decarbonization of operational activities.

Restrictive Policies and Enhanced Due Diligence

For information on how Barclays utilizes restrictive policies and enhanced due diligence in client engagements, please refer to page 20 of its 2023 PRB Reporting and Self-Assessment Template.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

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References:

This case study is based on published information by Barclays, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://home.barclays/content/dam/home-barclays/documents/citizenship/ESG/2024/2023 Barclays Principles for Responsible Banking Disclosure.pdf

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