NatWest Group, a UK-based financial services company, has announced a new sustainable finance target, aiming to provide £200 billion in climate and transition finance from July 2025 to the end of 2030. This ambitious goal represents a substantial increase from its previous target, which aimed to provide £100 billion in climate and sustainable funding between July 2021 and the end of 2025. The announcement follows NatWest’s achievement of surpassing the prior goal, having reached over £110 billion by the end of the most recent quarter.
The new target notably broadens NatWest’s focus to include transition finance. The company highlighted the “vast investments” required in industries that deliver climate solutions, as well as in hard-to-abate and emission-intensive sectors such as iron and steel, cement, petrochemicals, shipping, and aviation.
NatWest has set targets to achieve net zero by 2050 across its financed emissions, assets under management, and its operational value chain. The new goal aims to support this net zero ambition by offering financing and facilitation options to help clients meet their climate and transition objectives.
In conjunction with the new target, NatWest has released its new Climate and Transition Finance Framework. This framework replaces the previous Climate and Sustainable Funding and Financing framework and outlines definitions, eligibility, and guiding principles for classifying financing and facilitation activities that contribute to the goal.
The framework defines transition finance as the financing and facilitation of assets, activities, acquisition targets, and companies that directly or indirectly contribute to the removal or life-cycle emission reduction of greenhouse gas emissions. It focuses particularly on carbon-intensive and hard-to-abate sectors, supporting the transition towards net zero by 2050, while avoiding the development of carbon-intensive assets beyond that date.
It also sets eligibility criteria across various sectors. For instance, in the transport sector, “Sustainable low carbon transportation” such as electric cars and buses is classified as eligible climate finance, while “Heavy duty fleet upgrade to enable alternative fuel usage” qualifies as transition finance. However, “Logistics and transport services related to fossil fuel activities” are excluded under the framework.
James Close, Head of Climate Change at NatWest Group, stated, “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.”
