British financial services giant Barclays has joined a host of global banking rivals ramping up efforts to find companies that will generate hefty returns by solving some of the world’s most pressing problems.
Barclays launched a Sustainable and Impact Banking unit that will identify “new, high-growth clients” focused on “environmental and social challenges,” and also advise “existing clients on sustainable growth strategy and finance.” Barclays veteran Brian Reilly, the company’s global head of equity capital markets, will lead the new unit, which is part of the investment banking division.
“Companies with a stated mission of addressing the world’s most pressing societal and environmental challenges are continually emerging in every sector,” Reilly said in a statement.
Banks from UBS to Citigroup have been boosting their so-called impact funds, in response to customer demand for investments that seek profit and social good. In August, the Business Roundtable announced a stakeholder-centered view of corporate governance that moves away from shareholder primacy.
Last month, Deutsche Bank announced that it would begin using an ESG scorecard from data and analytics firm MSCI to help its high net worth clients make social impact investment decisions. In May, Blackstone launched a unit that will invest in social impact enterprises in healthcare, financial services, sustainability and green technology.
“Companies with a stated mission of addressing the world’s most pressing societal and environmental challenges are continually emerging in every sector.”
Over the past two years, Barclays investment banking arm has been focusing more on social impact issues, advising clients on equity offerings and private placements for companies in the environment-social-governance space. It also created sustainability-linked credit products, including more than $57 billion in green, sustainable or social bonds since January 2018.
Investors increasingly are expecting financial services firms to account for social impact issues in their strategies. A 2019 survey by public relations giant Edelman found that seven in 10 people believe “it’s important for financial services to lead on social issues that make the world a better place.”
- Barclays investment banking unit has been on an upswing with revenues of $1.1 million in its third quarter, a 77% increase from the same period a year ago.
- Barclays ranks eighth among investment banks both in the value of M&A deals and public offerings on which it has advised in 2019, according to Dealogic, which tracks the investment banking industry.
- The Balance website ranked the firm as the top investment bank in Europe. Goldman Sachs ranked as the best investment bank overall.