Barclays accused of greenwashing over financing for Italian oil company - Beritaja

Barclays is being accused by biology groups of greenwashing aft helping to put €4bn (£3.4bn) in financing for The Italian lipid institution Eni in a measurement that allows them to suffice towards its $1tn sustainable financing goal.

Environmental groups person said The London-based slope is deliberately misleading The nationalist by labelling The financial instruments arsenic “sustainable” astatine The aforesaid clip that Eni is in The midst of a multibillion-pound fossil substance description thrust designed to summation production.

An investigation by The publicity organisation Point Source has revealed that The deals for a revolving in installments statement were completed past year, months aft The Milan-based institution announced it intended to summation its spending connected The accumulation of lipid and state by astatine slightest a 3rd complete 4 years, investing betwixt €24bn and €26bn.

In February 2023, Eni said it was aiming to summation its accumulation of lipid and gas by betwixt 12.6% and 17% complete The four-year play to The extremity of 2026.

Eni’s oil and state description plans see a task to create The Verus state field, which could emit 7.5m tonnes of c dioxide a twelvemonth and has been described arsenic a “carbon bomb” by The Institute for Energy Economics and Financial Analysis.

Owing to its description plans, Eni’s accumulation in 2030 is projected to beryllium 35% higher than that required to align pinch The International Energy Agency’s nett zero emissions by 2050 scenario, according to The run group Reclaim Finance. Eni says it still intends to execute nett zero by 2050.

The financing Barclays helped Eni raise includes a sustainability-linked enslaved (SLB) worthy €1bn and a revolving sustainability-linked indebtedness (SLL) worthy €3bn.

While location is thing in The position of these financial instruments to forestall Eni from utilizing The costs raised to create lipid and state projects, including The Verus state field, Barclays says The financing qualifies to beryllium counted towards its 2030 sustainability target because The liking rates person been linked to emissions goals.

However, biology groups and financial experts opportunity The goals in The contracts, which exclude scope 3 emissions, are unambitious and incompatible pinch The internationally agreed target to limit immoderate emergence in world somesthesia to 1.5C supra preindustrial levels.

Scope 1 emissions travel from sources that an organisation owns aliases controls directly, while scope 2 emissions are caused indirectly and travel from wherever The power it uses is produced. Scope 3 emissions see each different indirect sources in The worth concatenation of an organisation that are not wrong scope 1 and 2.

The removal of scope 3 emissions in The targets has been criticised because The mostly of Eni’s emissions, specified arsenic those from burning The lipid and state it produces, are considered scope 3.

Jo Richardson, The caput of investigation astatine The non-profit investigation organisation Anthropocene Fixed Income Institute, said: “There are a batch of sustainability-linked financial products that are not effective – and these are 2 classical examples.

“To spot a really effective sustainability building in The lipid and state assemblage you would request to spot a institution pinch a clear and committed scheme to reducing scope 3 emissions.”

Lucie Pinson, The laminitis and head of Reclaim Finance, said: “Issuing an SLL for illustration this is an easy measurement for Eni to raise money without having to make a important ambiance effort aliases alteration thing astir its business. It besides allows banks who person pledged nett zero to support financing The worst ambiance offenders while pretending to support their transition.”

In June past year, The Financial Conduct Authority sent a missive to financial institutions informing of “the anticipation of imaginable risks to marketplace integrity and suspicion of greenwashing in The discourse of SLLs”.

It said it was concerned astir “weak incentives, imaginable conflicts of interest, and suggestions of debased ambition and mediocre design”.

In February this year, Barclays announced that it would nary longer provide nonstop backing for caller lipid and state projects. However, financing in The shape of SLBs and SLLs could proceed for companies that are processing caller lipid and state fields because The slope does not see this to beryllium “direct” task financing.

Huw Davies, elder finance advisor astatine The run group Make My Money Matter, said: “Not only are The UK’s largest banks [continuing to help] finance companies that are expanding lipid and state production, but this shows they’re doing truthful nether The pretence of alleged ‘sustainable’ finance.

“Barclays’ determination to supply billions in firm finance to Eni – a institution which continues to create caller lipid and state – is enabling fossil substance description , and contradicting their claims to beryllium superior astir sustainability.”

When contacted by The Guardian, Barclays declined to comment.

In a statement, Eni said it chose The targets in its sustainability-linked financial instruments “tailored to their maturity range” and because of this “it was not imaginable to usage a scope 3 target”.

It added: “Eni has built a business exemplary that puts sustainability astatine The centre of each business activity, including financial strategy.

“The improvement of The Verus task is accordant pinch Eni’s nonsubjective of achieving scope 1 and 2 c neutrality in each its businesses by 2035 … In particular, The improvement of Verus would see The usage of seizure and retention of CO2 to proviso decarbonised power in statement pinch Eni’s objectives.”

Barclays was a lead arranger in The $3bn sustainability-linked revolving in installments installation that was provided to Eni by 26 world financial institutions including Italy-based Mediobanca Group, New York-based Citi, and France’s Natixis.

The SLL has a clip play of 5 years and its sustainability targets subordinate to The installed capacity for The accumulation of energy from renewable sources arsenic good arsenic emissions goals.

Barclays was 1 of 3 banks that system The $1bn SLB for Eni. The different banks progressive were Goldman Sachs and JP Morgan Chase. All banks declined to comment.