Barclays is being accused by environmental groups of greenwashing after helping to arrange €4bn (£3.4bn) in financing for the Italian oil company Eni in a way that allows them to qualify towards its $1tn sustainable financing goal.
Environmental groups have said the London-based bank is deliberately misleading the public by labelling the financial instruments as “sustainable” at the same time that Eni is in the midst of a multibillion-pound fossil fuel expansion drive designed to increase production.
An investigation by the journalism organisation Point Source has revealed that the deals for a revolving credit line were completed last year, months after the Milan-based company announced it intended to increase its spending on the production of oil and gas by at least a third over four years, investing between €24bn and €26bn.
In February 2023, Eni said it was aiming to increase its production of oil and gas by between 12.6% and 17% over the four-year period to the end of 2026.
Eni’s oil and gas expansion plans include a project to develop the Verus gas field, which could emit 7.5m tonnes of carbon dioxide a year and has been described as a “carbon bomb” by the Institute for Energy Economics and Financial Analysis.
Owing to its expansion plans, Eni’s production in 2030 is projected to be 35% higher than that required to align with the International Energy Agency’s net zero emissions by 2050 scenario, according to the campaign group Reclaim Finance. Eni says it still aims to achieve net zero by 2050.
The financing Barclays helped Eni raise includes a sustainability-linked bond (SLB) worth €1bn and a revolving sustainability-linked loan (SLL) worth €3bn.
While there is nothing in the terms of these financial instruments to prevent Eni from using the funds raised to develop oil and gas projects, including the Verus gas field, Barclays says the financing qualifies to be counted towards its 2030 sustainability target because the interest rates have been linked to emissions goals.
However, environmental groups and financial experts say the goals in the contracts, which exclude scope 3 emissions, are unambitious and incompatible with the internationally agreed target to limit any rise in global temperature to 1.5C above preindustrial levels.
Scope 1 emissions come from sources that an organisation owns or controls directly, while scope 2 emissions are caused indirectly and come from where the energy it uses is produced. Scope 3 emissions include all other indirect sources in the value chain of an organisation that are not within scope 1 and 2.
Source: Theguardian
