Soft Commodities

Climate, nature and tropical deforestation

At NatWest Group, we view climate change, the continued significant global decline in nature and resource scarcity and their associated impacts as significant dangers to the livelihoods of our customers and society at large, both currently and in the years to come. Climate change and environmental degradation are inextricably linked, and each require immediate and significant action to avert potentially irreversible impacts.

Over 420 million ha of forest were lost to deforestation from 1990 to 2020; more than 90% of that loss took place in tropical areas.1 Global land use change, principally deforestation contributes to 12-20% of global carbon emissions.2 Whereas, if protected and restored it is estimated nature based solutions including afforestation could provide up to 37% of the greenhouse gas mitigation required before 2030 to stabilise warming to 2°C.3 As the Taskforce on Nature-related Financial Disclosures states “The future of all living things on our planet, and our future prosperity, depends on the resilience of nature."4

Background to Soft Commodities reporting at NatWest Group

Whilst, as a UK focused bank, we do not have significant lending exposure in countries with tropical rainforest,5 the UK is a significant consumer of commodities with links to deforestation. Many customers and suppliers in our value chain may have operations and indirect links that contribute to deforestation. Our partner World Wide Fund for Nature (WWF) 2020 report with Royal Society for the Protection of Birds (RSPB) identified an area equivalent to 88% of the total UK land area was required to supply the UK’s demand for just seven agricultural and forest risk commodities between 2016 and 20186. As highlighted in the 2024 House of Commons Environmental Audit Committee report,7 the UK’s deforestation footprint per tonne of product consumed is high compared to most other countries. There is pending secondary legislation in the UK to the 2021 Environment Act8 as well as the EU Deforestation Regulation9 in the EU which may impact a number of our customers.

This reinforces the importance of our continued voluntary soft commodities reporting, which is integrated into our Environmental Social and Ethical risk acceptance criteria (ESE RAC). This builds on outputs from our participation in the ‘Soft Commodities’ Compact. Founded by Cambridge Institute for Sustainability Leadership (CISL), the compact concluded in 2020 with the report Banking Beyond Deforestation.10 NatWest Group has continued to report and use the framework established by the ‘Soft Commodities’ Compact in our approach to deforestation. Our soft commodities reporting targets customers that import or directly produce soya, palm oil, timber, pulp & paper, beef, leather, cocoa and rubber. For more information on associated topics, including our ESE policies that have been in place since 2011 and human rights, please see the associated topics section at the end of this page. 

Process followed

The process involves finding the customers that are in scope, defined as operating in, or importing deforestation linked commodities from, tropical areas.

These in scope customers are checked against the appropriate certification and membership bodies. A limitation to this approach is that it relies on these bodies having up to date membership and certification lists as well as the certifications being consistent in their zero deforestation standards.  

Important limitations

Soft commodities reporting is limited compared to other reporting that we undertake. It is a manual process and as such whilst effort is taken to include in scope customers there could be a number that have not been included.

This reporting is focused only on customers directly producing or importing specified soft commodities from tropical areas. It does not apply to other NatWest customers and suppliers whose value chains may cause, contribute or be directly linked to deforestation.

The process is reliant on the certificate and membership bodies having adequate controls and keeping membership lists and records up-to-date. NatWest has not investigated the veracity of these certificate issuers or membership bodies. 


Due to additional due diligence checks included from the initial scoping in 2023 (step 1 in the above chart), a higher number of customers were identified as being ‘in-scope’. These were located through scanning systems for customers potentially in scope but not captured by the ESE Forestry, Fisheries and Agribusiness risk acceptance criteria. The additional customers found through this enhanced due diligence activity were all conglomerates, having several business activities means that classification for relevant ESE sector policies is more complex. This year we located the highest number of in scope customers, at 44 this is an increase upon 34 that were located the previous reporting year. In addition, as a result of the comparatively small number of customers in some commodity sectors, even the change of a single customer can have a significant impact on the proportion certified or not certified.  We are therefore reporting that for a number of commodities, particularly soya, the percentage of customers assessed that did not have certification increased (see table below of year-on-year results). We will continue to work with each customer to attain certification as this is likely to have the greatest positive impact in reducing deforestation, improving business models and reducing risks. Noting the deadline for attaining relevant certification within our ESE Risk Acceptance Criteria is 31 December 2024.  

Related topics

Environmental Social and Ethical Risk

This approach is integrated into our Environmental Social and Ethical (ESE) Forestry, Fisheries and Agribusiness (FFA) risk acceptance criteria which prohibits soft commodities producers operating in tropical regions who have not obtained sustainable certification of their direct soft commodities activities and supply chain by 31 December 2024.  NatWest Group’s ESE risk framework has been in place since 2011 and is updated on a regular basis. We have integrated the soft commodity targets and specified certifications into the FFA ESE policy. From this year, NatWest Group is now further enhancing our approach to integrating nature into our climate strategy. We intend to develop the capabilities and necessary tools to measure, monitor and report on our environmental impacts, dependencies, risks and opportunities.

NatWest Group’s ESE risk acceptance criteria sets our position on what activities and customers we prohibit ourselves from onboarding. These apply to the onboarding of non-personal customers (including, but not limited to, for the purposes of providing lending or loan underwriting services). Furthermore, they set out restricted activities upon which we conduct enhanced due diligence. These include risk acceptance criteria for sectors and topics including but not limited to; Human Rights, Forestry, Fisheries and Agribusiness, Mining and Metals, Animal Welfare and Power Generation. 

We are members of the Equator Principles which is a voluntary framework adopted by financial institutions to help determine, assess and monitor environmental and social risks associated with project finance. These have been integrated into our ESE risk framework, including for Forestry, Fisheries and Agribusiness (FFA). For more details, please refer to the FFA policy through the link below.

Project Finance & FFA ESE risk acceptance criteria

Equator Principles for Project Finance


Human rights and modern slavery

Human rights are undermined by nature loss and the impacts of climate change. This can include land rights, conflict and security, labour rights and unjust working conditions. Indigenous people are at further risk due to the connections between nature and land rights, cultural rights and self-determination.

Find more on our approach to Human Rights and Modern Slavery

Footnotes and references