Barclays revealed to have been involved in over 10 deals to harmful tar sands sector since committing to net-zero
New research has shown that the fight to end the extraction of tar sands for energy is not yet over, as the biggest financial players still have significant interests tied up in the companies that produce and export the harmful substance.
Banks like Barclays and HSBC have received a shot across the bow for their involvement in financing tar sands companies, and should start leaving the sector immediately, says a new report.
But what are tar sands?
Tar sands are up there with the baddest baddies of all the fossil fuels. They are a mixture of sand, clay and water soaked with an extremely thick form of crude oil known as bitumen which occurs mostly in northern Canada.
Production alone can result in emissions three to five times higher than conventional oil, and leaves behind contaminated water that can pollute waterways. It has also been blamed for deforestation and biodiversity loss in Canada’s forests, and has triggered a number of human rights controversies concerning the indigenous peoples in the region.
What are the main findings in the report?
ShareAction, the responsible investment NGO which produced the report, found that Barclays, HSBC, and Credit Suisse are the only European banks that are heavily involved in financial deals with companies responsible for searching and drilling for more tar sands. And they have no plans to leave.
Despite a lot of PR by banks in the last few years around moving out of the sector, little has changed. A clever loophole allows the banks to say they won’t directly finance specific projects like pipelines and plants, but they are still allowed to fund the companies that build and operate infrastructure. This means there’s still a huge pipeline of money chanelled into tar sands. The world’s largest banks have siphoned around $102 billion of funding into the sector since the Paris Agreement was signed, according to RAN.
Barclays is responsible for $3.2bn of this. Shockingly, since its net-zero ambition was announced, the bank has been involved in 11 financial deals with the tar sands industry. Now that doesn’t sound very net-zero.
In fact, on the same day that it made its net-zero commitment (30 March 2020), Barclays played a key role in providing a $2.1bn loan to Enbridge. Enbridge is North America’s largest energy infrastructure company and has a long track record of oil spills and Indigenous rights violations, according to RAN. Enbridge is currently building a new pipeline, Line 3, which would be one of the largest crude oil pipelines in the world, carrying up to 915,000 barrels per day of tar sands crude – one of the most carbon-intensive fuels on earth.
In addition to the huge environmental and human rights impact of tar sands activity – as if that’s not enough – the sector also hosts a cocktail of financial risks for banks. Tar sands just aren’t that economically viable. One author of the report likened the European banks’ involvement in the sector to ‘picking up pennies in front of a steam roller.’
And Barclays and HSBC will continue to pick up pennies as long as they can as the steam roller of climate change rolls on. But they’re also behind the wheel, and it’s time we got them out of the driving seat.
What next?
Barclays is set to publish more detail on how it intends to reach net-zero (don’t get your hopes up) soon. That’s its chance to say no to tar sands, to say no to coal, and no to companies with big plans for oil and gas future.