Barclays has been accused by environmental groups of greenwashing after it helped 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 that 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.
But an investigation by the journalism organisation Point Source has also 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 that 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.
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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.
Story was adapted from the Guardian.
