Climate and Sustainable Funding and Financing is critical to achieving the transition to a net-zero carbon and climate-resilient economy. Having surpassed our previous £20bn target in H1 20211 , in October 2021 NatWest Group announced an additional £100 billion Climate and Sustainable Funding and Financing by the end of 20252, helping our customers on their path to a net zero economy.
The Climate and Sustainable Funding and Financing provided to date has included financing for various low carbon generation and energy efficiency technologies, low carbon vehicles and has enabled customers to raise funds through green bonds, loans and green private placements. Our new £100 billion Climate and Sustainable Funding and Financing target will continue to support UK decarbonisation and the Government’s Net Zero Strategy, in-line with the 10-point plan for a Green Industrial Revolution3 , by building on opportunities across key sectors:
- Backing renewables and wind – NatWest Group has been externally recognised as a leading lender to the UK renewables sector by number of transactions over the past 10 years4 . In 2020, NatWest Group was ranked 1st in UK project finance renewables lending.
- Green Finance – NatWest Markets (NWM) Group is the No.1 lead manager5 for Green, Social and Sustainability (GSS) bonds issued by UK Corporates and No.1 for GBP-denominated GSS bonds across all sectors, with an estimated 16.8% share of the GBP-denominated GSS Bond market. During the first half of 2020, NatWest Group became the first UK bank to issue $600 million of green bonds into the US onshore market, with the proceeds allocated to renewable energy projects across the UK. During the first half of 2021 32 Green bonds and private placements totalling a notional amount of £24.3 billion (36 deals, £22.7 billion during 2020), account for c.16% of the total lead managed transactions by NWM Group during the period.
- Homes and public buildings – our Green Mortgage product was launched in October 2020 and offers lower interest rates for customers purchasing homes with an EPC rating of A or B, rewarding them for playing their part in helping to drive the UK transition to a low carbon economy. Retail Banking completed Green Mortgages with a value of £431 million during H1 2021.
- Electric Vehicles - In February 2021, NatWest Group launched a partnership with Octopus Energy, the UK's fastest growing energy technology company, to help make it simple for customers and colleagues to move to electric vehicles (EVs). NatWest will continue working with our partners to facilitate electric vehicle transition and transportation decarbonisation by easing investment in infrastructure.
Some transaction highlights include:
- NatWest Group provided financing and risk solutions to Dogger Bank Wind Farm, which will be the world’s largest offshore wind farm once constructed.
- NWM Group acted as bookrunner on the Kingdom of Sweden’s inaugural sovereign Green Bond, raising SEK20 billion of proceeds linked to central government expenditures to meet Sweden’s environmental and climate goals, which include protection of valuable natural environments, climate investments and railway maintenance.
- NWM Group supported Cadent Gas, the UK gas distribution network, to issue a €500 million 12-year transition bond aligned to the EU Sustainable Finance Taxonomy and the UK’s National adaptation plan.
To provide transparency, we publish our Climate and Sustainable Funding and Financing Inclusion Criteria (CSFI) (PDF 220KB) that we use to determine the assets, activities and companies that are eligible to be counted towards the £100 billion target until 31 December 2021. Current and previous CSFI Criteria can also be found in the Downloads page under 'Policies - sector ESE, procurement, and more'.
In October, we also published our new CSFI Criteria that will be used to determine the assets, activities and companies that are eligible to be counted towards the £100 billion Climate and Sustainable Funding and Financing Target from 1st January 2022.
The main changes and expansions to the previous CSFI Criteria are:
• Revisions to the Built Environment category to align to the Bank’s Green, Social and Sustainability Bond Framework and reflect the launch of green purchase and re-mortgage products.
• Removal of ‘Nuclear’ and ‘Energy from Waste’ in the Low Carbon and Offsetting technology category to align to the Green Gilt Framework.
• Inclusion of sustainability bonds, as well as sustainable linked bonds and loans.
• To supplement the existing general lending category, which allows any general-purpose lending or wider financing to customers who can evidence (to NatWest Group’s satisfaction through review of the issuer’s or borrower’s most recently published external results) that 50% or more of their revenues are from the categories and sectors outlined in the CSFI Criteria the following additional categories / specifications have been added:
- in case of Utilities or Real Estate customers in case 75% or more of their assets are in the categories and sectors outline in the CSFI Criteria; and
- in case of a fund client – if 75% of Assets under Management are invested in activities outlined in the CSFI Criteria, at the time of reporting.
Natwest Group offer services, funding and financing solutions to customers, to help them achieve their climate ambitions. The table below summarises our progress against the £20 billion Climate and Sustainable Funding and Financing activity over 2020 and H1 2021, demonstrating the support provided to customers during the period to help transition to a low carbon economy.
1 Having delivered £12 billion in 2020, we brought forward our target from 2022 to 2021
2 from 1 July 2021
4 Source: Inframation Deals League Table
5 As at end of H1 2021
Notable External Benchmarking
NatWest Group has been externally recognised as a leading lender to the UK renewables sector by number of transactions over the past 10 years. In 2020, NatWest Group was ranked 1st in UK project finance renewables lending.*
*Source: Inframation Deals League Table
In 2020, NWM Plc, acting as lead manager, was ranked 1st in Green, Social and Sustainability (GSS) bonds issued by UK Corporates** and had an estimated 16.8% share of the GBP-denominated GSS Bond market as measured by notional amount.***
** Source: Dealogic Full Year 2020
*** Source: Bloomberg Finance L.P. 31 December 2020
For more details on NatWest Group climate and sustainable finance, including key highlights for 2020, please see our full 2020 Climate related disclosures report (PDF 9.8MB).