Almost 80% of directors on the boards of the UK’s big five banks have connections to polluting industries, a new analysis has found. The figures suggest such ‘climate-conflicted’ directors could represent a systemic obstacle to progressive climate action, as shareholders prepare to meet to consider a range of progressive environmental resolutions at the banks’ AGMs.
The analysis by environmental investigators DeSmog shows many of the banks’ directors have close ties to polluting industries and their financial backers, either as current directors, advisors or previous employees. This could affect their ability to be impartial judges of shareholder resolutions trying to push the banks to actually end financing of fossil fuels, campaigners claim.
Recent research shows that financing of coal by banks has increased since the signing of the Paris Agreement on climate change.
This is not surprising considering almost a quarter of the directors currently sitting on the banks’ boards have a current or past connection to the fossil fuel industry, the analysis shows.
For instance, Standard Chartered director Gay Huey Evans is also a non-executive director of big oil company Conoco Phillips. Her Standard Chartered board colleague Byron Grote also has a long history of working in the oil industry, including for BP, and is a current director of the global mining company, Anglo American.
Barclays director Tushar Morzaria is currently a director of BP, for which another Barclays director Brian Gilvary, was until recently CFO. Gilvary is currently executive chair of INEOS Energy, a new unit that has taken on the company’s oil and gas assets. Their Barclays colleague Mary Francis was also a past director of big energy company Centrica, which still owns a number of North Sea fossil fuel assets.
HSBC director Jose Antonio Meade Kuribrena is a director of Mexican company Alfa, which is involved in oil exploration. HSBC directors Pauline Van Der Meer Mohr and Irene Lee have both been involved with fossil fuel companies Shell and Noble Group respectively. Lloyds director Lord Lupton currently holds shares in Shell and mining company Rio Tinto. And Mark Seligman, who sits on NatWest’s board, was a director of oil company BG Group, which was bought by Shell in 2015.
Many directors also have close connections with the aviation industry, the analysis shows. Howard Davies, a NatWest director, was chair of the Airport Commission, which recommended Heathrow proceed with a third runway. Standard Chartered director Jasmine Whitbread was Chief Executive of London First, an advocacy group that lobbied the government to approve Heathrow’s third runway plans.
Her Standard Chartered colleague Carlson Tong is currently an observer to the board of airline Cathay Pacific, for which HSBC director Irene Lee was a director until 2019. Another HSBC director, Jackson Tai, was likewise a director of Singapore Airlines for three years until 2014. And Lloyds director Amanda Mackenzie previously worked for British Airways.
Almost half of the banks’ directors also have strong ties to other banks known to support the fossil fuel industry, including Citigroup, Goldman Sachs, Morgan Stanley, UBS, and JP Morgan.
Banks are increasingly facing public pressure to tackle the climate crisis by removing their support for high-carbon industries. HSBC’s directors are currently considering a shareholder motion, backed by major investors, requesting that the bank decreases its exposure to fossil fuels, starting with coal. Barclays is also facing a similar resolution to phase-out support for fossil fuels.
Rachel Sherrington, DeSmog’s lead researcher for the project said: “There is a notable prevalence of directors with current and past connections to some of the world’s most polluting industries on the boards of UK banks. These individuals have spent their careers immersed in the norms and ideology of those high-carbon industries. There is a concern that such experience makes them ideologically favourable to the organisations responsible for driving the climate crisis.”
“But the directors have an opportunity to prove people wrong. Banks have a significant role to play in addressing the climate crisis by cleaning up their portfolios, and removing support for environmentally damaging industries. Public support for scientifically-led action on the climate crisis is high, and the directors of the UK’s banks have the chance to put themselves on the right side of history.”
Jeanne Martin, senior campaign manager at ShareAction, said: “This is startling evidence of worrying conflicts of interest within bank boardrooms, many of which are currently facing critical decisions related to their financing of carbon emissions. How can we possibly expect those at the very top of banks such as Barclays and HSBC to make difficult, yet necessary, decisions on fossil fuels given their close links with fossil-fuel dependent industries? Investors should take note of the revolving door between banks and the fossil fuel industry and use their voting rights to discharge climate-conflicted directors.”
Adam McGibbon, Campaigner at Market Forces UK, said: “Barclays are the biggest funders of fossil fuels in Europe. It’s no wonder they are so reluctant to phase out their massive financing of the fossil fuel industry, with a significant number of board members complicit in it. Financial institutions are critical to driving the transition to clean energy, so it’s terrifying that their directors’ views are being shaped by the fossil fuel industry. How can Barclays reasonably claim to support the Paris Agreement when their directors are linked to an industry with a vested interest in the Paris Agreement failing?”
- 50 out of 64 current directors of Barclays, HSBC, NatWest (formerly Royal Bank of Scotland), Lloyds and Standard Chartered have a past or present connection to a company or organisation participating in a high-carbon or polluting sector, according to DeSmog’s analysis.
- DeSmog analysed the past and current ties of all of the board members of Barclays, HSBC, NatWest (formerly Royal Bank of Scotland), Lloyds and Standard Chartered to polluting industries. An affiliation was classified as ‘climate-conflicted’ if the sector in which the company predominantly participates is infamously polluting, including: fossil fuel energy exploration/production/generation, agriculture, aviation, road transport, mining, plastics and chemicals, forestry and paper production, construction, and shipping. In addition to this, an affiliation was classified as ‘climate conflicted’ if the company is included on the Climate Action 100+ list, Global Coal Exit list, Break Free From Plastic index, Bank Track’s “Fossil Banks” listings, DeSmog’s Climate Disinformation Database or scored poorly on InfluenceMap’s profile or – if an investment company – was found to have polluting projects in its portfolio.
- 15 out of the 64 current bank directors have a past or present connection to the fossil fuel industry, according to DeSmog’s analysis.
- 29 of the 64 current bank directors, or 45% of directors, have a past or present connection to banks known to support fossil fuel and other polluting industries, as defined by BankTrack and the Fossil Banks project.