NatWest has announced it will stop offering loans to new customers hoping to fund oil and gas exploration, extraction or production projects, as part of a wider climate transition plan due to be unveiled next week.
The banks’s chief executive, Alison Rose, said similar steps would be taken to phase out the same funding for existing customers, meaning the bank would refuse to renew, refinance or extend loans for upstream gas projects from the start of 2026.
“We want to ensure our capital is being used to support a transition while continuing to reduce the financing of harmful emissions,” Rose said.
“I hope this sends a strong signal that we are serious about ending the most harmful activity while financing the transition,” she added.
Rose made the announcement as she trailed the release of the bank’s first climate transition plan, which is due to be unveiled alongside the bank’s full-year results next Friday. The plan, which will be one of the first released by a UK bank, will give a sector-by-sector breakdown of how NatWest will halve the emissions created by the projects and companies it finances by 2030.
Rose said that the bank – which is still 48% owned by the UK government – would be “prioritising sectors with high emissions rates or balance sheet exposure values”.
However, the amount of carbon-heavy projects that NatWest funds as a proportion of its overall loan book is relatively small, accounting for 0.7% of its outstanding loans, worth about £3.3bn as of last year.
The NatWest boss also announced that the bank was launching a pilot project focused on demonstrating “that retrofitting homes at scale can be an achievable and affordable goal”.
It will involve partnering with a “coalition of landlords”, as well as Centrica and Schneider Electric, and focusing on improving the energy efficiency of social housing across the UK.
Rose said she was also in discussions with Airbnb on how to help hosts retrofit their homes through NatWest’s green loans – having invited Airbnb’s chief executive for Europe, Amanda Cupping, to her speech at the NatWest headquarters in London.
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“I understand the cost of living is what most people are focused on, but I believe that cost of living concerns can lead to more and better action on tackling climate change,” Rose said. “The announcements I’ve made today are just the start of our activity in 2023 to tackle the climate crisis.
“I hope it shows good progress and the right intent and leaves you in no doubt that tackling climate change continues to be a major priority for this bank,” she added.
