Barclays net zero commitment questioned as it helped raise $1.7 billion to fund coal power in the US
By ITV News Business and Economics Producer Mahatir Pasha and The Bureau of Investigative Journalism's Josephine Moulds
On the banks of the Ohio River in the United States, you'll find the Ghent power plant.
It generates electricity using coal, the world’s most polluting fossil fuel.
Every year, Kentucky Utilities burns five and half million tonnes of coal at this site, enough to power half a million homes.
The US coal industry has been in dramatic decline in recent years, under pressure from renewable power and an abundance of cheaper shale gas.
But coal is not dead yet and Barclays Bank is one of the banks helping to keep it alive.
Barclays has an ambition to reach Net Zero by 2050.
To get there, the bank is not required to immediately stop doing business with companies which use coal, but it does need to phase out such lending.
Barclays Climate Change Statement, published in February 2024, sets out the bank’s policies.
The document states Barclays will not provide “any financing to clients that generate more than 50% of revenues from thermal coal-fired power generation”.
The pledge was first made four years ago but it doesn’t go as far as the pledges made by the UK's other big banks - HSBC, NatWest and Lloyds.
And some argue that, in practice, this pledge is largely meaningless.
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Analysis by The Bureau of Investigative Journalism (TBIJ) shows Barclays helped to raise $1.7 billion last year for companies in the United States which appear to breach the 50% threshold.
Two loans of $400 million were for Monongahela Power which got all of its revenues from selling electricity - 95% of which came from burning coal at two power stations in West Virginia.
In addition to the Monongahela deals, Barclays helped raise $400 million for Kentucky Utilities, which appeared to get 73% of the electricity it sold in 2022 from burning coal.
Barclays also helped raise a $500 million loan for Louisville Gas & Electric. The company makes some of its revenues from selling gas but calculations based on company and government data suggest its revenue share from coal, was 57%.
None of these companies plans to stop using coal by 2030, a deadline climate scientists say is critical.
Barclays says it hasn’t breached its coal policy which it insists is robust.
The bank told us the revenues from Monongahela, Kentucky Utilities and Louisville Gas and Electric fall within the 50% threshold when the transmission and distribution of the generated electricity is included.
But it declined to share its workings with us.
In a statement to ITV News, Barclays Bank said: “We have robust procedure to ensure our financing aligns with our policies. Based on publicly disclosed information and our due diligence, the coal revenues for Louisville Gas & Electric, Kentucky Utilities and Monongahela Power complied with our revenue policy threshold.
“Consistent with IEA Scenarios, we are committed to phase-out lending to clients involved in thermal coal by 2030 for EU and OECD countries and by 2035 in the rest of the world."
It added: “Barclays is financing an energy sector in transition, providing finance to meet current energy needs and also financing the scaling of clean energy.”
The Grantham Research Institute On Climate Change and the Environment at the London School of Economics & Political Science is a world-leading authority on how best to manage the challenging transition to net zero.
The institute is chaired by the internationally renowned economist, Lord Nick Stern.
Bob Ward, the organisation’s Policy and Communications Director, says the distinction Barclays makes between the generation, distribution and transmission of electricity is spurious.
“Nobody should be propping up the American coal industry anymore”, Ward told ITV News.
"I think most consumers and investors will question Barclays' true commitment to withdrawing its money from climate-damaging energy sources if it's using semantics to get around its own commitment," he said.
Ward said: "It sounds to me like that's exactly what Barclays is doing at the moment".
Barclays has come under criticism recently for its lending practices. Activists disrupted the bank's annual general meeting this year to protest.
Some of the bank’s shareholders also think the bank needs to move away from coal faster.
One of them is Nest Employment Savings Trust. Nest manages the pension savings of 13 million workers in Britain.
It is putting pressure on Barclays to tighten its coal policy.
“Ultimately companies that are very heavily exposed to the thermal coal sector are at risk of failing over the next few years, and therefore the companies that finance them, like Barclays, are at risk of not getting their money back,” Katharina Lindmeier, head of Sustainability Strategy at the organisation, said.
Katharina Lindmeier said companies that finance the coal sector "are at risk of not getting their money back".
Barclays declined ITV News' request for an interview.
On Thursday, the bank held a results call for journalists.
Ordinarily, we are able to ask a question to its chief executive but not on this occasion.
Barclays’ coal policy may not be as strong as it sounds but at least it has one - many of the US global banks do not.
Burning coal to generate electricity releases twice as much carbon dioxide into the atmosphere as burning natural gas.
A steep decline in coal emissions is essential if catastrophic levels of global warming are to be avoided.
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