Barclays Plc is not exempt from its cost-cutting efforts, impacting even its important deal-making initiatives. Reports indicate that Barclays is reducing staff in its energy transition team, established earlier this year. Among the cuts are six team members specializing in climate technologies like carbon capture and hydrogen. This move is part of broader job reductions within the company, which also includes the removal of two positions from the sustainable banking team.
According to sources familiar with the matter, these job reductions do not reflect poorly on the strength of Barclays‘ sustainable finance division. A Barclays spokesperson clarified that these decisions align with actions taken in other areas and do not undermine the bank’s ability to execute ambitious plans successfully. CEO C.S. Venkatakrishnan’s strategy to enhance returns includes a cost-cutting drive of 2 billion pounds ($2.5 billion), resulting in several hundred job cuts across various divisions like global markets and investment banking.
The energy transition team was formed earlier in the year to leverage the anticipated shift away from fossil fuels. Comprised of bankers from power markets, natural resources, and sustainable and impact investment banking, this team mirrors similar initiatives at competitors like BNP Paribas SA and Citigroup Inc. These firms are positioning themselves to tap into potential opportunities in what could evolve into a multitrillion-dollar market.
Both the energy transition and sustainable banking teams at Barclays have shown early promise, with Venkatakrishnan highlighting nine M&A transactions announced by the energy transition team since late December. The company also made key senior appointments in sustainable finance, indicative of its commitment to this area. Barclays aims to guide clients on adopting low-carbon technologies, reinforcing its presence in energy and power sectors, and expanding its climate-tech investment banking endeavors.
In the absence of clear regulatory guidelines, Barclays has formulated its definition of transition finance. Any financing that aids in reducing greenhouse gas emissions in high-emitting sectors like energy, aviation, and agriculture is seen as transition finance by the bank. Barclays‘ proactive approach underscores its dedication to supporting clients in navigating the complex landscape of environmental transitions and sustainable finance.