Six years ago, we set ourselves a bold ambition: to at least halve the climate impact of our financing activity by 2030, against a 2019 baseline, an important milestone in our transition to net zero by 2050.
Now, with a substantial amount of work and critical learnings behind us, we’ve made good progress towards our ambition. This includes reducing the climate impact of our financing activity by 39% from 2019.
Crucially, there’s still some way to go. We need to stay focussed on supporting our customers by anticipating, adapting and responding to the reality of a transition that is unfolding in real time.
Last year, we acknowledged that meeting our ambition to at least halve the climate impact of our financing activity by 2030 appeared increasingly challenging.
Now, with the UK Climate Change Committee’s Seventh Carbon Budget report indicating faster national progress on decarbonisation and a more enabling policy environment, we’re pleased to retain our 2030 ambition, as we work towards our long-term 2050 net-zero ambition.
Building on what we’ve learnt, this commitment calls for a renewed approach to sharpen our effectiveness; making sure we focus our resources on supporting the transition where it matters most and aligning our efforts with the evolving national policy agenda.
We remain committed to supporting our customers through the transition, underpinned by strong corporate governance and transparent disclosures. These principles will continue to guide our decisions, shape how we help our customers navigate the path ahead and help ensure that we continue to communicate our progress with clarity.
Our approach to net zero
Financial institutions continue to play a critical role in supporting the transition to net zero. Our approach is focused on financing decarbonisation and managing our own emissions.
Our greatest strength is being a trusted partner to our customers. This includes helping those working towards net zero make confident decisions as they navigate risks and opportunities in their transition journeys.
Last year, we exceeded our £100 billion target for climate and sustainable funding and financing early and we’ve since set a new target. Our £200 billion climate and transition finance target expands our customer support to accelerate progress, whether that be backing large-scale renewable projects, supporting sustainable transport options, or helping homeowners make their homes more energy efficient.
In 2025, we continued reducing operational emissions and improving energy efficiency across our own offices and buildings through targeted investments and innovative solutions. This has helped us to make progress towards our 2030 operational emissions ambitions.
Sharpening our focus
Shaped by our learnings to date, including understanding where we can deliver the right impact, we’ve refined the way we set and measure progress.
This is why we’re moving from 16 sector targets to 9 activity-based targets, all focused on the areas where we can make the biggest difference such as energy, property and food. It's a more material, simpler and targeted approach.
Our approach to energy supply
Our energy system review reflects the complexity of the economic transition and the broader direction of the national policy agenda.
We continue to prioritise renewables and low-carbon solutions. While our exposure to oil and gas represents less than 1% of the bank’s balance sheet, we also recognise the important yet declining role oil and gas will play as the UK transition progresses – and with the support of a strong governance and oversight framework, we will continue to engage with and support this sector, rather than disengage prematurely.
In light of the evolving landscape and reflecting the outcome of our energy system review, we have published a new Environmental & Social Energy Supply Sectors Risk Acceptance Criteria. The revised criteria clarify our prohibitions and restrictions on fossil fuel related activities, while allowing flexibility in how we support the transition of energy supply sectors.
Looking ahead
Overall, we’ve made important progress in supporting customers and communities in the transition to a net-zero economy.
We’re positive about the growth opportunities created by the UK’s continued commitment to net zero and the updates we’ve made to our approach help to strengthen our ability to finance decarbonisation.
We will continue to learn, adapt and respond to the external landscape as it evolves, while remaining dedicated to achieving the ambitions we’ve set ourselves.
