Barclays’ annual general meeting in London may have been disrupted by climate change protesters this week, but the bank has made steady progress on sustainability. The banking giant still finances oil and gas pipelines, which is under “review”, but it increasingly supports the low-carbon economy.
Its latest move into sustainable finance comes with the launch of loans to help businesses when building out new projects, or providing new sustainable services. Barclays is backing earth-friendly projects in the UK through its new ‘green trade’ working capital product.
Under the scheme, the bank will provide facilities of minimum £250,000 to eligible green initiatives, including projects to promote energy efficiency, eco-friendly transport, waste management, renewable energy, sustainable food, agriculture and forestry, and sustainable water management. The bank will also fund cross-sector activities, such as the development of energy sector policies, regulations and training. This could include research into climate change mitigation.
A proposal will qualify for funding if it meets criteria set out in Barclays’ Green Product Framework, developed in 2017 with specialist research firm Sustainalytics. The facilities will be offered as working capital loans for 30 to 365 days.
A Barclays’ spokesperson informs GTR that while the initiative is predominantly aimed at companies looking to borrow for their own working capital needs, the bank is also able to provide the green funds as supply chain finance, financing a firm’s suppliers directly. The spokesperson adds that the bank has not set a limit for facility sizes or how many projects it will be supporting under the new scheme. Successful applicants can also qualify for additional financing from the national export-import bank UK Export Finance (UKEF), the spokesperson confirms.
Baihas Baghdadi, global head of trade and working capital at Barclays says in a statement that he hopes the new loan offering “will play a big part in building momentum” in the transition to a low-carbon future.
“Late last year, we launched a range of products to encourage more environmentally conscious activity from our clients, but knew that developing a dedicated proposition to meet working capital needs and targeted at increasing sustainable trade was also required to support UK businesses’ aspirations. We’re proud that the Barclays Green Trade Loan is now available to facilitate more green trade and hope that it will play a big part in building momentum in support of the transition to a low-carbon future,” he says.
Ultimately, the aim of the new product is to “bring green finance into the mainstream” for all the bank’s clients, adds Rhian-Mari Thomas, chair of the Barclays Green Banking Council.
“The Barclays Green Trade Loan adds to our growing green corporate banking proposition and furthers our ambition to bring green finance into the mainstream for all our customers and clients.”
Barclays says it looks forward to receiving applications from a range of businesses, regardless of whether or not they are already customers of the bank.
Read more at Global Trade Review