(Bloomberg) -- Barclays Plc Chief Executive Officer C.S. Venkatakrishnan said political polarization surrounding ESG issues is affecting the global shift to sustainability at a crucial time.
"We are standing on the brink of a transformative era in the drive towards a net zero economy," Venkatakrishnan said Tuesday at a Barclays ESG conference for clients in New York. "You already are seeing in the world signs of a wavering strength of commitment."
After long promoting their climate work, many major financial institutions are now scaling back participation in international climate agreements. The move comes amid pushback from top Republican lawmakers and conservative groups in the US against investing strategies that factor in environmental, social and governance considerations.
Last month, JPMorgan Chase & Co.'s asset-management division and State Street Global Advisors said they're leaving the Climate Action 100+ investment initiative, with State Street citing proxy concerns. Blackrock Inc. also scaled back its membership in the group.
"People are still committed, but we feel like we go forward and we go a little backward," Venkatakrishnan said Tuesday. The global shift to a low-carbon world will be "long, hard and complex," but Barclays's commitment is unwavering, he said.
A gap in financing can inhibit the momentum, and the London-based lender is working with companies across sectors, he added. Barclays financed $67.8 billion of sustainable and transition financing, as part of its target of $1 trillion by the end of 2030, Chairman Nigel Higgins said in the bank's 2023 annual report.
This year, the UK lender is among top underwriters helping companies and governments around the globe sell sustainable bonds at the fastest pace ever. Barclays has been involved in about 4% of a record $269.4 billion worth of green, social, sustainability and sustainability-linked bonds sold this year through Tuesday, according to data compiled by Bloomberg. That makes it the seventh-biggest underwriter of the debt.
Constellation Energy Generation LLC hired Barclays and other banks when it raised $900 million in green bonds last week to fund eligible projects that may include nuclear-power initiatives in the latest sign that the once-unthinkable idea of issuing green debt to finance nuclear-power generation is spreading.
Conversations with clients have shifted over the last five years and the question of how to get much better on energy is now the No. 1 topic, partly driven by climate concerns, International Business Machines Corp. CEO Arvind Krishna said during a panel discussion at the Barclays conference.
"It's hard to deny that volatility in climate is happening more and more," Krishna said. "There is a risk and so people are beginning to worry about that."
Efficient energy usage and waste reduction can boost a company's profit margins, and failure to comply with environmental policies in Europe and other regions can lead to penalties, Krishna said. Transformative technologies such as artificial intelligence will play a key role in helping firms make changes, he said.
"Profit and purpose go together," he said. At IBM, "we are on our path to net zero by 2030. It costs us less to do that than to not do it."
Venkatakrishnan has called carbon emissions one of today's "defining issues," and Barclays aims to be net zero by 2050, according to its website. As part of the initiative, the bank plans to reduce its supply-chain greenhouse gas emissions by 50% by the end of 2030.
The Sierra Club recently highlighted the bank's new energy policy, saying that while it's "a promising step in the right direction," it still allows the bank to provide corporate financing to companies such as Shell Plc and Exxon Mobil Corp.
"Nonetheless, this new policy contrasts sharply with recent backsliding and slowing progress from major banks in the United States," the group said.
--With assistance from Silla Brush.
(Updates with IBM details from ninth paragraph. An earlier version of this story corrected day of week in fifth paragraph.)
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