RBS parent NatWest makes important pledge over oil and gas lending

Royal Bank of Scotland owner NatWest Group has pledged to scale back on lending to oil and gas companies amid new climate change initiatives due to be unveiled next week.

The banking giant said it would no longer provide reserve based loans to new customers for the purpose of financing oil and gas exploration, extraction and production. Reserve based lending is a specific type of financing used by upstream oil and gas companies. It comes as a group of investors wrote to five of Europe's biggest banks, including Barclays, urging them to stop lending to fossil fuel firms. The group of up to 30 investors, co-ordinated by responsible investment group ShareAction, has combined assets of more than $1.5 trillion (£1.24tn).

NatWest chief executive Dame Alison Rose said she wanted to send a very clear message that the lender was not “letting up on tackling climate change”. The bank also pledged that from 2026, it would not renew, refinance or extend existing oil and gas lending. And from this month it promised to only support upstream oil and gas companies if the majority of their assets being financed were based in the UK, and if they reported to NatWest the overall emissions of the assets they operated by the end of 2023.

Hide Ad
Hide Ad

Rose said: “We want to ensure our capital is being used to support a transition whilst continuing to reduce the financing of harmful emissions. I hope this sends a strong signal that we are serious about ending the most harmful activity whilst financing the transition.”

She added that the group would be publishing a climate transition plan next week, at the same time it released its full-year figures to the City. The plan would inspect the bank’s lending and investment book and demonstrate how it planned to halve the climate impact of its financing activity.

“We know that in some areas we can take action ourselves but in others we are dependent on government policy,” Rose added. “This vital partnership between the public and private sectors is the key to unlocking the challenge of our lifetime at pace and scale.”



Want to join the conversation? Please or to comment on this article.