Having previously reduced its exposure to oil and gas by £878m during 2021, NatWest has committed to stop doing business with further coal and oil and gas companies that do not have “credible” decarbonisation plans.
Within their latest annual climate disclosure report, NatWest published details on Friday of their intention to reduce fossil fuel exposure by £967m (of a total £1.43bn) by winding down lending and underwriting to fossil fuel customers whose current plans are deemed insufficient to align with the commitments of the 2016 Paris Agreement.
NatWest did not, however, commit to a specific timeframe. Speaking to the Financial Times, head of climate change James Close instead stated the changes would be enforced “as soon as is practicable”, ahead of a commitment to stop all new lending to coal projects by January 2030. This latest public announcement of NatWest’s intentions is no doubt welcome within the climate change agenda, but eyes will now be on the banking group to commit to a more specific deadline.
Speaking last year to the wider banking decarbonisation movement, Leslie Samuelrich, president at investment advisory firm Green Century Capital Management stated, “getting lenders to choke off money to fossil fuel companies is the next needed move for the industry to address the material risks that the coal, oil and gas industry faces.”
Environmental Defense Fund associate vice president Ben Ratner cut to the chase, stating, “the test for a bank’s climate health is not the slickness of its marketing material or even the amount spent on green energy, but whether the entirety of the bank’s activities are aligned with the goals of the Paris Agreement.”
Click here for our ESG hub, and click here to stay up to date with the latest news and insights from Fulcrum.