In 2020, we set out our climate ambition to be a leading bank in UK in helping to address the climate challenge. Since then, we’ve established ourselves as an influential voice for finance on tackling climate change. We’ve come a long way in the past three years, but we mustn’t lose sight of the fact there is still much more to do. 


A roadmap to climate transition

In December 2022, NatWest Group became the first UK bank – and one of the largest banks globally – to have science-based targets validated by the Science Based Targets initiative (SBTi). These targets underpin the initial iteration of our Climate transition plan, published in our Climate related Disclosures Report in February 2023, which outlines the steps we aim to take to at least halve the climate impact of our financing activity by 2030 and achieve our net zero climate ambition by 2050.

We’re working hard to support our customers’ transition

It explains how we’ll support our customers’ transition to net zero and outlines what we’re doing to help end the most harmful activities; our work to build powerful partnerships and collaborations; and how we’re working to get our own house in order.

We know that trying to meet our net zero climate ambition is a huge task and change isn’t going to happen overnight. That’s why this initial iteration of our Climate transition plan focuses on the delivery of our 2030 decarbonisation ambitions. 


Making progress

We’re working hard to support our customers’ transition, with offerings like the Home Energy Plan – a free and publicly available online tool – which gives users advice and customised suggestions on how to make their homes more energy efficient.

We know that combatting climate change depends on powerful partnerships.

We want to send a strong signal that we’re serious about helping to end the most harmful activities. Which is why, in February 2023, we announced that we will not provide reserve based lending specifically for the purpose of financing oil and gas exploration, extraction and production for new customers. After 31 December 2025, we will not renew, refinance or extend existing reserve based lending specifically for the purpose of financing oil and gas exploration, extraction and production.2

We know that combatting climate change depends on powerful partnerships. It must be a collaborative and wide-reaching effort, bringing together our partners, stakeholders and peers. In February 2023, we announced a new collaboration with Places for People, British Gas Centrica and Schneider Electric – coordinated by Pineapple Sustainable Partnerships – on a pilot project to show that retrofitting homes, at scale, can be both an achievable and affordable goal.

Through our asset finance arm Lombard, we’re working with the frozen foods manufacturer McCain Foods to offer its potato growers increased funding support and preferential terms to transition to regenerative agriculture.

We’re also engaging with industry and government to use our voice to influence the agenda on net zero policy and to help accelerate change. We’re working with the conservation organisation WWF to bring together UK Government, food companies, farming organisations, financiers and NGOs to focus on financial and practical interventions to support farmers, such as incentives for farmers to collect data and the adoption of common metrics.

Getting our own house in order – and focusing on the changes we can make in our own operations – is also crucial to achieving our net zero ambition. By 2025, we aim to reduce emissions from our own direct operations – like how much paper we use or the waste we produce – by 50%, against a 2019 baseline.2 In 2022, we achieved 46% carbon reduction in our direct own operations (location-based) and reported our upstream and downstream operational value chain emissions for the first time.3

Adopting a systems thinking approach

Central to the preparation of the initial iteration of our Climate transition plan is understanding the correlation between different parts of the economy to help target products, services and investment to where they can have the greatest effect on decarbonisation.

During 2022, we focused on developing transition plans at a sector level, prioritising key sectors linked to property, energy, mobility and food, which often have the most impact on the UK’s carbon footprint and our customers’ day-to-day lives.

As our Climate transition plan evolves, we’re adopting a systems thinking approach. This will help us to consider how carbon flows between different sectors in the economy and the factors that determine the size and importance of those flows. The factors are wide-ranging and can include government policy, the carbon intensities of materials or technologies, how value chains are set up, as well as consumer preferences and behaviour.

Using systems thinking will help to identify the opportunities to change the size and direction of carbon flows in sectors related to the system. Analysis can also highlight the gaps between sectors, demonstrating where opportunities exist to mobilise our capital to deliver changes to the system.

More about our Climate transition plan

Learn more about the initial iteration of our Climate transition plan in our Climate-related Disclosures Report 2022.

Consistent, long-term policy commitments from the UK government are vital

Consistent, long-term policy commitments from the UK government are vital and we’re working to build powerful partnerships and collaborations between the public and private sector. We provided extensive input into the ‘Mission Zero: Independent Review of Net Zero’ led by Chris Skidmore MP, published in January 2023, and during 2022, we worked alongside the UK Government to support the UK Pavilion at COP27, hosting high profile events with partners like the Sustainable Markets Initiative (SMI) and WWF-UK.

Through our engagement with industry, government and policy makers, we’re using our voice to influence the net zero agenda. Our 2022 thought leadership report, ‘A Springboard to Sustainable Recovery’, highlighted a revenue opportunity of more than £175 billion for the UK economy between now and 2030 through the transition to net zero.4

We also continue to play an active role in The Sustainable Homes and Buildings Coalition with partners British Gas, Worcester Bosch and Citizens Advice. In October 2022, the Coalition published the ‘Home is where the Heat Is: Progress Report’, reiterating its call to the government to make energy efficiency a national priority.5


A first step

Developing the initial iteration of our Climate transition plan marks an important milestone in our journey to net zero, but there’s still a long way to go. The initial iteration of our Climate transition plan confirms that more action is needed by NatWest Group and our customers to meet our ambition and decarbonisation plans. It’s also clear that support from timely and appropriate government policies will be needed to incentivise transition and changes in customer behaviour.

The plan focuses on our 2030 ambitions for net zero and gives us a framework to build on, helping us to identify and unlock new opportunities. We’ll evolve the initial iteration of our Climate transition plan to further embed climate in our decision-making and financial planning processes, and continue to support our customers transition to net zero. Over the coming years, we want to maintain momentum and demonstrate our commitment to helping to address the climate challenge.

About James Close

James is Head of Climate Change at NatWest Group and leads the Group’s Climate Centre of Excellence. Before joining NatWest Group, James worked at the London Waste and Recycling Board and at the World Bank as Director of Climate Change.

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This is for media use and not a financial promotion.

Caution about this article. The views and opinions expressed in this article are those of James Close, and do not necessarily represent the views of the NatWest Group.

This article (i) has been prepared for information and reference purposes only; (ii) is intended to provide non-exhaustive, indicative and general information only; (iii) does not purport to be comprehensive; and (iv) does not provide any form of legal, tax, investment, accounting, financial or other advice. 

This article should be read together with the full Climate Matters document (with special regard to the Cautionary Statements) relating to this content. 

Please see NatWest Group’s 2022 Climate-related Disclosures Report for those views and other information including about our financed emissions and our exposure to heightened climate-related risk sectors.

1. NatWest Group plc 2022 Climate-related Disclosures Report, p41

2,3. NatWest Group plc 2022 Climate-related Disclosures Report, p51

4,5. While the information of these reports is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates included in this report are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

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