Sustainability
Climate and environment
Deforestation and Land Use

Deforestation and Land Use

Deforestation risk in context

WWF have noted that forests are our greatest asset in the fight against climate change and are home to 80% of terrestrial biodiversity¹.

Forestry and agribusiness industries provide vital resources that when managed responsibly and fairly, can help deliver food security, economic stability and facilitate the energy transition through provision of outputs that can be used as bioenergy. In addition, natural resources associated with these industries can help protect against climate change by serving as carbon sinks, natural flood defences and soil erosion barriers.

Yet, these natural resources are increasingly under pressures from climate-related stressors, such as drought and wildfires, while demand for forest products is expected to grow².

Global commodity production, particularly forest products, soy, palm oil, beef, rubber, coffee, and cocoa, is a significant driver of deforestation³.

Additionally, global population growth and shifting consumer appetite, can also place natural resources under strain, leading to deforestation, habitat loss including peatland conversion, water scarcity and the depletion of food stocks essential to local communities.

Managing deforestation risks

We continue to work to integrate management of 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.

We developed a forestry risk acceptance statement in 2011, which was expanded in 2014 to include agribusiness and fisheries. Over time this developed into the Forestry, Fisheries and Agribusiness (FFA) Environmental, Social and Ethical - now Environmental and Social (E&S) - Risk Acceptance Criteria (RAC) which forms part of our E&S Risk Framework.

The E&S Risk Framework applies to all legal entities in NatWest Group for the on-boarding of non-personal customers for the purpose of providing financing⁴ and applies to the management of E&S risk throughout these customers’ life cycles. In 2025, we expanded the coverage of our FFA E&S RAC, broadening the scope of customers requiring deforestation risk-related commodities certification⁵ to include primary processors as well as producers operating in, or directly sourcing from, high deforestation risk countries as defined by Forest 500. We also included coffee within the list of commodities requiring either Rainforest Alliance and/or Fairtrade certification.

Deforestation risk-related commodities requiring certification under our FFA E&S RAC include raw wood/timber, lumber, pulp and paper, natural rubber and latex⁶, palm oil, soy, cocoa, coffee, leather and beef.

Details of our E&S Risk Framework can be found here and the FFA E&S RAC can be found on our downloads page.

Deforestation is often accompanied by human rights abuses⁷. In 2023 we identified our six salient human rights issues which included contribution to climate change and land rights⁸. More details on our approach and how we manage our salient human rights issues can be found at Human rights and modern slavery page.

Voluntary deforestation risk-related commodity (“DRRC”) reporting approach to date

NatWest Group was a founding member of the Soft Commodities Compact (the “Compact”), a voluntary initiative, which was set up in 2014.

The purpose of the Compact was to support efforts to reduce deforestation in the supply chains of banks’ customers across four soft commodities - palm oil, timber products, soy and beef - particularly in markets at high risk of tropical deforestation⁹.

NatWest Group voluntarily reported against the principles of the Compact until its conclusion in 2020. This entailed assessing and reporting on whether customers who produce or process the commodities included in the Compact, in/from tropical regions had the relevant certifications and/or memberships. Following the Compact’s conclusion, NatWest Group continued reporting based on these principles on a voluntary basis.

Over time, we expanded the scope of our voluntary DRRC reporting to capture more commodities to include natural rubber, pulp and paper, beef and leather, and cocoa.

2025 voluntary DRRC reporting scope

In our 2025 DRRC reporting, we are aligning the scope of i) customers and activities, ii) soft commodities and iii) geographies included in the report to the same scope as our FFA E&S RAC. This change is to improve clarity and ensure we are no longer applying differing parameters between the FFA E&S RAC and the DRRC reporting.

We also applied materiality thresholds to in-scope customers, excluding those with lending under £0.5m or turnover under £2m.

The 2025 DRRC reporting entailed reviewing internal data, third-party data and publicly available information to verify certification compliance, in line with the approach taken to our DRRC reporting in previous years.

2025 DRRC report

In 2025, the total number of in-scope customers (pursuant to the new scope detailed above) identified were 9 - some customers are involved with several in scope commodities.

Soft commodity	# of customers
Raw wood/Timber	1
Pulp and paper	4
Lumber	0
Natural rubber and latex	1
Palm Oil	1
Soy	1
Cocoa	1
Beef	1
Leather	0
Coffee	2

Our exposure to these in-scope customers was £352m as at 31 December 2025, representing 0.06% of our total NWG exposure.

As the 2025 DRRC reporting evolved in scope to align with the scope of the FFA E&S RAC, prior-years’ DRRC reporting results may not be directly comparable with the 2025 results.

Out of the 9 customers identified, 8 hold the relevant certifications, while one customer is under ongoing review in accordance with the FFA E&S RAC processes.

Going forward

Our DRRC reporting to date has been provided on a voluntary basis. It was originally developed to report against the principles of the Compact. Following the Compact’s conclusion in 2020, we continued the reporting on a voluntary basis while our approach to managing deforestation risk continued to evolve.

Deforestation risk is considered through our E&S Risk Framework (via the FFA E&S RAC), alongside other E&S risks. We do not typically publish standalone, topic-specific reporting for individual E&S risk areas. To ensure clarity and consistency with our broader approach to E&S risk areas, we will discontinue standalone DRRC reporting. We rely on our E&S Risk Framework processes (including the FFA E&S RAC) as the primary mechanism for identifying, assessing and managing deforestation-related risks.

Our wider sustainability disclosures, including our climate-related disclosures continue to be available in our annual reporting suite. Our commitment to identifying, assessing and managing deforestation risks remains unchanged.

For more information on our E&S Risk Framework please see our Environmental & Social (E&S) and Reputational Risk Management page.

Important limitations

The quality of the data relied upon and the systems and controls that support the 2025 DRRC reporting is not of the same standard as more traditional financial reporting. It is a manual process and as such, whilst effort is taken to include in-scope customers, there could be a number that may have not been included. Issues that can cause this include, but are not limited to, accuracy of public information. For the purpose of the 2025 DRRC reporting, we relied on certification bodies’ website membership lists being kept up to date and accurate. The process is reliant on the certificate and membership bodies having adequate controls and NatWest Group has not investigated the adequacy of such controls. NatWest Group makes no warranty, representation or undertaking as to the accuracy or completeness of such third-party data, and accepts no liability for any loss or damage arising out of the use of, or reliance on, such third-party data.

Whilst we cite the relevance of climate and human rights this is only with relevance to deforestation. Although some of the certifications have human rights obligations and commitments, we have not analysed this.

The information, statements and opinions contained in this page do not constitute a public offer under any applicable legislation (in any jurisdiction); an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. This page and the information and statements included in this page are not formally part of any offering documents and are not contractually binding. This page is not intended (i) to form part of any communication of any offering issued under this page and it is not intended to be an advertisement for the purposes of the UK Prospectus Regulation and investors should not make any investment decisions based on the information included in this page; or (ii) to be a communication in relation to any particular product or service for the purposes of Section ESG 4.3.1 of the Financial Conduct Authority Environmental, Social and Governance sourcebook.

Information Message

Footnotes and references

WWF 2023. The Forest Pathways Report.
Food and Agriculture Organization of the United Nations 2024. The State of The World’s Forests.
United Nations Environment Programme 2025. State of Finance of Forests 2025: Unlock. Unleash. Realizing Forest Potential requires Tripling Investments in Forests by 2030.
Refers to any financing, refinancing and facilitating activity through lending (including reserve-based lending), loan underwriting, bond underwriting, arranging and/or distribution of debt or equity, as well as trade and working capital finance.
Non-certified customers with time-bound action plans in place to achieve certification within two years from being identified as in-scope for each applicable commodity will be recorded as Restricted Risk. Where certification or equivalent is not achieved following this two-year period, the customer will move to a Prohibited classification.
The October 2025 version of our FFA E&S RAC did not explicitly list lumber, natural rubber and latex however these were included in practice. The RAC has been updated to make this clearer.
Forest500 2024. A decade of deforestation data – Annual Report 2024.
NatWest Group 2023. Salient Human Rights Issues.
Implementation of the 'Soft Commodities' Compact.