Barclays CEO Says Banks Can’t Go ‘Cold Turkey’ on Oil Clients

The chief executive of Barclays Plc characterized as unrealistic growing calls for the finance industry to abandon fossil-fuel clients.

Banks “cannot go cold turkey” on the oil and gas industry, Barclays CEO CS Venkatakrishnan told Bloomberg’s Anna Edwards at the Bloomberg Sustainable Finance Forum in London on Tuesday.

While Barclays’ is “very much moving from away from” coal and oil, the “reality is that for quite some time, fossil fuels will be with us” and that’s especially true of natural gas, he said. The “glide path” toward cleaner energy is long, he said.

Banks and asset managers are increasingly finding themselves at the receiving end of vocal — and sometimes violent — protests in response to their support of fossil fuels. A case in point is Citigroup Inc., whose Manhattan headquarters are currently the target of what activists say will be a months-long campaign against the bank.

Barclays this year created a dedicated team of more than 100 bankers to focus on financial products and deals pegged to the energy transition. The unit, which brings together bankers from power markets, natural resources and sustainable and impact investment banking, is one of many being built across global banks all keen to get a foothold in what could become a multitrillion-dollar market.

The finance industry has sought to push back against such campaigns, with high-profile names including KKR & Co. founder Henry Kravis accusing protesters of underestimating the scale of the transition needed.

Earlier this year, Barclays pledged to halt the direct financing of new oil and gas projects, and to restrict financing for companies that focus exclusively on fossil-fuel exploration and extraction. And like a number of its European peers, the UK bank is stepping up pressure on energy clients to adjust their business so they can be treated as transition assets.