Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 76 report information sustainability report Governance review review statements Annual Report 2022 Risk and opportunities (continued) TCFD Strategy Recommendation (a) beyond 2030. We will continue to review this area deliver on net zero by 2050. This consists of a scaling and commercialising new technologies Climate-related opportunities closely. number of mature and scaling technologies but such as hydrogen and carbon capture, Barclays is identified over the short, medium with renewable energy (including wind and solar) developing a framework for such transition Following the analysis of market demand for and low emissions transport (including electric financing during 2023. and long term sustainable financing, together with a review of vehicles, fuel cell electric vehicles and mass the Group's capabilities, in December 2022 we Retail and Business Banking transit) expected to make up over half of the During 2022, Barclays completed a review announced a new target to facilitate $1trn of Within the UK, sustainable opportunities in Retail addressable market through to 2030. and assessment of the global market Sustainable and Transition Financing between and Business Banking represent a $225-286bn opportunity for sustainable financing, 2023 and the end of 2030. Alongside this, there are significant longer-term market opportunity by 2025, increasing to an focusing on the period to 2030 (i.e. short and opportunities in financing the scaling of estimated $640bn-1trn by 2030. This projected Further details of Barclays' sustainable finance targets can be medium term). This work considered the + capabilities in nascent technologies such as found on page 99 and further details on how Barclays' growth is split across three main sectors: opportunity arising from the global products and services are harnessing this opportunity on carbon capture utilisation and storage (CCUS) pages 103 to 116. • green home loans, transition to a low-carbon economy that will and hydrogen solutions, which we hope to • electric vehicle (EV) financing, and be needed if the world is to avoid the worst capture as part of our $1trn target between 2023 effects of climate change and the Assessing the market opportunity • green SME lending. and the end of 2030. opportunity for the financial community to To determine the addressable global market Green home loans, including green mortgages Sustainable Finance Instruments play its part in supporting the global for sustainable finance to 2030, Barclays for existing and new homes and retrofit financing, Sustainable Finance Instruments represent an Sustainable Development Goals. The work leveraged widely used and credible third- represent the largest individual market at estimated $3.5-6trn annual issuance opportunity considered the size of the market party sources including the IEA, IRENA, $140-170bn in 2025, growing to $400-600bn in through to 2030 across North America, Europe opportunity and the potential addressable Climate Bonds Initiative and the IFC, as well 2030, with new homes mortgages representing and Asia Pacific (excluding China), with Europe market for Barclays. as Barclays' own industry, ESG and market the largest proportion of the opportunity at expected to remain the primary market for ESG research. The analysis considered the c.60-70%. Growth is mainly dependent on UK debt. It was c.60% of global issuance in 2021. investment needed through to 2030 for the The work identified three thematic areas of government delivering on its ambition to achieve world to align to net zero, including While green bonds represented the largest potential opportunity for Barclays: net zero. We recognise there are significant accelerated scenarios reflecting possible individual market at c.$500 bn in 2021, all ESG dependencies for that ambition to be realised. • Energy Transition Finance, including policy and market developments. instruments are expected to grow, including renewables and nascent/early-stage climate Having determined the global addressable Further details of the drivers of change in the Residential Real social loans/bonds (promoting positive social + technologies that will need financing to scale Estate sector can be found on page 93. market, Barclays developed scenarios for outcomes), sustainable loans/bonds (serving as they support the transition to net zero the bank’s potential market for various asset both green and social projects) and EV financing of new and used auto loans has an • Sustainable Finance Instruments, consisting classes, product sets, technological sectors sustainability-linked bonds (loans/bonds indexed estimated 10-year addressable market of of non-climate-related financial instruments, and geographic markets, validated through to green or social KPIs). $240-400bn for Barclays, with EV sales expected specifically social, sustainability-linked and comparison with historic growth rates and to increase 10-fold in the next 10 years, reaching The analysis indicated that ESG debt (excluding transition bonds/loans our projected share of the overall market. up to 97% of annual car sales by 2030 in the UK. green bonds and loans) represents an estimated • Retail and Business Banking, which focuses on Barclays expects the markets to be primarily 10-year $400-650 bn cumulative financing BUK and the retail market, including green driven by policy and legislation, for example, the opportunity for Barclays based on our current Energy Transition Finance mortgages (including retrofitting), electric UK policy to ban sale of new petrol and diesel cars global market share in sustainable finance The analysis indicated that based on current vehicle loans and SME lending. from 2030. instruments. policy, technology and market developments, These three thematic areas cut across Barclays' Green SME lending represents a $10-16bn We see opportunities to expand our share and Energy Transition Finance represents an businesses and do not align precisely to individual opportunity by 2030. Our analysis focuses on drive growth, particularly in the Utilities, Energy estimated 10-year addressable opportunity of product and service areas or reporting three sectors - agriculture, non-residential and Public Sector sectors and in sustainability- over $16trn across North America, Europe and segments. It is recognised that some buildings and manufacturing and construction - linked instrument issuances. Alongside growing Asia Pacific (excluding China). This extends to up technologies or solutions that will facilitate the with retrofitting non-residential buildings being the green finance, we recognise we must also tackle to $24trn over the same time period if policy, world to align to net zero are not yet fully largest market opportunity at c.$7-10bn. the decarbonisation of "hard to abate" sectors technology and market developments step up to developed and will likely come to maturity that are carbon intensive, including through