Back to main menu
Search
Search
Overlay

Nature and climate change

Our evolving approach to nature

Climate change, nature loss and the responses to these challenges have implications for the economy, society, and the financial system.

NatWest Group recognises the role of nature‑based solutions in supporting climate resilience and adaptation.

While climate change, nature loss and the associated political, societal and environmental responses to them present opportunities, they also present risks. We continue to work to integrate management of these climate and nature-related risks into strategic planning, transactions and decision-making. However, we recognise that our approach to nature-related risk is not as mature as our approach to climate-related risk. 

Supporting our customers’ nature needs

Between 1 July 2021 and 30 June 2025 we provided £110.3 billion in climate and sustainable funding and financing[1] therefore exceeding our target to provide £100 billion between 1 July 2021 and the end of 2025.

In July 2025, we announced a new target to provide £200 billion in climate and transition finance between 1 July 2025 and the end of 2030. The CSFFI criteria, which underpinned our previous £100 billion target, has been retired and replaced with our climate and transition finance (CTF) framework. Between 1 July 2025 and 31 December 2025, we provided £19.0 billion in climate and transition finance.[2]

Activities eligible under the CTF framework include for example:

  • Sustainable and/or regenerative farming practices
  • Air, soil, and water pollution control

 

In 2025 we brought together a dedicated Sustainable Finance Advisory (SFA) team that unites climate and sustainable finance colleagues and specialists from across the business. SFA offers expertise to help customers reduce their broader environmental footprint and own their impact as data and methodologies develop. Refer to page 48 of the 2025 Climate Transition Plan Report.  

We are continuing to work to accelerate the transition to more sustainable food and farming systems by exploring tailored financing solutions in partnership with our large corporate clients.

Information Message

[1] Climate and sustainable funding and financing, as defined in the climate and sustainable funding and financing inclusion criteria, represents only a relatively small proportion of our overall funding and financing activities. For the reporting periods ended 31 December 2024 and 30 June 2025, the NatWest Group CSFFI criteria published in March 2024 were used to determine eligible assets, activities, targets and companies for inclusion. For previous reporting periods and CSFFI criteria used, refer to page 20 of NatWest Group’s 2024 Sustainability Report. Details of all CSFFI criteria used can be found on our downloads page. NatWest Group’s own Green, Social and Sustainability bond issuances are not included towards the target.

[2] Climate and transition finance, as defined in the CTF framework, represents only a relatively small proportion of our overall financing and facilitation activities. NatWest Group’s own Green, Social and Sustainability bond issuances are not included towards our CTF target.

Supporting water infrastructure investments

Increasing pressure on water resources is one emerging area of focus where the need for public-private investment is clear.

  • Our work in this area is demonstrated by our role as lead arranger for United Utilities, helping to finance the Haweswater Aqueduct Refurbishment Project.
  • We  also supported Wendling Beck, a 2,000-acre landscape-scale project in Norfolk which is delivering natural flood management through river meandering and floodplain restoration. 
thunder storm sky Rain clouds Cracked dry land without water

Enhancing our understanding

In line with supervisory expectations on environmental risk management in the EU, in 2025 NatWest Markets N.V., an EU subsidiary of NatWest Group, continued to work on embedding environmental risks into its stress testing framework.

A water scarcity stress test was conducted to assess NatWest Markets N.V.’s credit exposure to sectors identified as water-vulnerable. The scenarios modelled a drought in Western Europe and considered governmental, regulatory, economic and societal responses and the resulting operational and financial impacts on in-scope companies. Results indicated notable credit grade migration and material portfolio impact across the water-dependent sectors assessed. These sectors included automotive and power utilities and also represent a high level of concentration within the NatWest Markets N.V. portfolio.

While the approach was tactical and limited to a single time horizon, it offers insights to guide further embedding of environmental risks and customer engagement. Refer to page 58 of the Climate Transition Plan Report. 

Customer engagement

The Environmental Decisioning Framework enables engagement with customers on physical and transition environmental-related risks – including nature-related risks. 

Learn more about our approach to responsible lending and financing:

ESG policies and downloads repository Open in new window

Collaborating for nature

  • Supported WWF-UK dairy campaign: engaged with farmers and Government in England and Wales on addressing barriers to transition for dairy farmers, showcasing how nature-friendly practices can improve resilience.
  • Green Finance Institute and WWF-UK: supported campaign to develop nature-positive transition pathways for key sectors in the UK Government’s Environmental Improvement Plan.

 

For more details, see page 51 of the NatWest Group plc 2025 Climate Transition Plan Report.

Colleague engagement

In 2025, colleagues demonstrated an ongoing commitment to sustainability learning, achieving around 12,700 completions of our climate and nature education resources developed in partnership with the University of Edinburgh.

 

Nature in Our Own Operations

During 2025, we built on last year’s location-specific analysis, with enhanced nature risk screening for high-risk UK and international properties. Using the Integrated Biodiversity Assessment Tool, we assess proximity to protected areas, threatened species and restoration potential. These insights may help to guide actions at high-risk sites and strengthen how we manage nature-related risks across our operations. Refer to pages 14-16 of the Climate Transition Plan Report for further details on our own operations.

Related content

Our approach to climate change

Read more about our ambition to become net zero by 2050, our approach and progress highlights.

Information Message

Climate and Transition Finance

Read more about our ambition to play a leading role in championing climate solutions and supporting our customers’ transition towards net-zero through Climate and Transition Finance.

Information Message

Our own operational footprint

Read more about our ambition to halve our direct own operations emissions by 2025 from a 2019 baseline, and our underlying progress. 

Information Message