UK-based financial services company NatWest Group announced the launch of a new sustainable finance target, aiming to provide £200 billion in climate and transition finance between July 2025 and the end of 2030.
The new goal marks a significant increase from NatWest’s prior target, to provide £100 billion in climate and sustainable funding and financing between July 2021 and the end of 2025, and comes at NatWest revealed that it has already surpassed the prior goal, reaching over £110 billion at the end of the most recent quarter.
Notably, the new target expands the scope of NatWest’s goal, to now include transition finance. In setting the new goal, NatWest noted the “vast investments” that will be required both in industries delivering climate solutions, as well as in hard-to-abate and emission intensive sectors such as iron & steel, cement, petrochemicals, shipping and aviation.
NatWest has targets in place to achieve net zero by 2050 across its financed emissions and assets under management, as well as in its own operational value chain. According to the company, the new goal is aimed at supporting its net zero ambition by providing financing and facilitation options that may help its clients reach their own climate and transition ambitions.
Alongside the new target, NatWest announced the publication of its new Climate and Transition Finance Framework, replacing its prior Climate and Sustainable Funding and Financing framework, outlining definitions, eligibility and guiding principles for classifying financing and facilitation activities that count towards the goal.
The new framework defines transition finance, as the financing and facilitation of assets, activities, acquisition targets and companies which directly or indirectly contribute to removal or life-cycle emission reduction of GHG emissions, with particular focus on carbon-intensive and hard-to abate sectors; support transition towards net zero by 2050; and, do not impede the development and deployment of low or zero carbon alternatives or lead to a lock-in of carbon intensive assets beyond 2050.
The framework also provides climate and transition financing eligibility criteria across a range sectors. For example, for the Transport sector, the framework classifies “Sustainable low carbon transportation including, but not limited to electric cars, electric buses, micro-mobility,” as an eligible climate finance activity, and “Heavy duty fleet upgrade to enable alternative fuel usage, such as biofuels, synthetic e-fuels and hydrogen,” as an eligible transition finance activity, while “Logistics and transport services related to fossil fuel activities” is listed as an exclusion under the framework.
In a post announcing the new target and framework, James Close, Head of Climate Change at NatWest Group, said:
“This will enable us to support the real economy alignment and transition towards net zero in line with the 2015 Paris Agreement. It will contribute to the investment required both in those industries delivering climate solutions and across a broader spectrum of industries, instruments and counterparties including the hard-to-abate and emission intensive sectors.”
