Barclays bosses defend climate ambitions as headquarters sprayed with 'oil'

By Sinead Cruise and Iain Withers

LONDON (Reuters) - The Chairman of Barclays <BARC.L> said the British bank "can and should play a leading role" in tackling climate change, hours after environmental activists sprayed imitation oil on its headquarters to call on the lender to divest from fossil fuels.

Barclays also faced another broadside from rebel shareholder Sherborne Investors <SIGC.L>, which again questioned whether Chief Executive Jes Staley should remain in post given his links to disgraced U.S. financier Jeffrey Epstein.

Addressing climate change concerns, Chairman Nigel Higgins said the lender was committed to becoming greener in a statement to mark the annual general meeting, which was held behind closed doors to comply with COVID-19 social distancing rules.

Activists from Extinction Rebellion said biodegradable and vegan "oil" was sprayed onto Barclays' office in Canary Wharf in London in protest at the bank's financial support of energy businesses.

A climate change motion put forward by investor group ShareAction was defeated at the AGM but won 24% of votes cast. A separate resolution on Barclays' strengthened climate policy won 99.9% support.

The ShareAction resolution had called on Barclays to set, disclose and evaluate targets to "phase out" financial services to fossil fuels, energy and utility companies.

Barclays proposed the setting, disclosure and annual assessment of targets to "transition" from such lending activities and to become a net zero bank by 2050, leading some critics to say the proposal gave the bank too much latitude to finance carbon over the medium term.

"Today's voting results will send shockwaves through the banking industry," Catherine Howarth, chief executive of ShareAction said.

"While Barclays is Europe's largest fossil fuel financier, it is far from being the only bank to prop up companies that are driving the climate crisis."

Barclays is seventh in a list of lenders to the fossil fuel industry, with nearly $120 billion lent between 2016-2019, data from U.S. pressure group Rainforest Action Network showed.

Barclays declined to comment on the Extinction Rebellion protest or the Sherborne statement.

CENTRAL QUESTION OF WHY

Sherborne, the bank's largest shareholder with a 5.8% stake, said last month it would defer a long-running campaign to displace Staley as the bank battled with the fallout from the COVID-19 pandemic. It said it would withhold its vote to re-elect him instead.

The activist investor led by Edward Bramson said the board's unanimous endorsement of Staley did not address the central question of why Staley continued to "benefit from doing business" with Epstein long after Epstein's crimes became public.

"In our view, this behaviour, alone, would make Mr. Staley unsuitable to be a director of any financial institution," Sherborne said.

"When other shareholders' votes become public in the coming weeks, we would be curious to know how those who voted for Mr. Staley's reappointment arrived at a different conclusion."

Britain's financial regulators are investigating Staley's links to Epstein, who killed himself in August while awaiting trial in the United States on sex-trafficking charges.

A significant proportion of the bank's shareholders did not vote, with at least 30% abstaining from each resolution.

Staley was re-elected with 99.6% support of the votes cast, which reflected 66% of the issued share register.

(Additional reporting by Simon Jessop; editing by Tommy Reggiori Wilkes and Barbara Lewis)