Upcoming webinar: The Role of Social Impact and Reporting in Sustainable Treasury Strategies – Thursday 5 June, 2pm BST 

We’ll be hosting the seventh module of the Sustainable Finance Leadership Toolkit Series, focusing on the growing importance of the ‘social’ asset class. 

The leadership series helps corporate finance, treasury, and investor relations professionals understand key sustainable finance topics. 

This session will address the rising social issues within the sustainable finance agenda, highlighting how enhanced regulatory scrutiny, escalating societal expectations, and significant financial impacts from social risks are driving issuers, institutional investors, and lenders to adopt a more systematic and strategic approach to incorporating social factors into their portfolios and products.

Book your place.
 

Recent news article: National Wealth Fund and NatWest Group to deliver £500m of funding for social housing retrofit 

£500m in funding will be delivered by us, backed by a £400m guarantee from the National Wealth Fund (NWF)1, to support the retrofit of social housing across the UK. 

The initiative aims to improve energy efficiency and decarbonise housing by financing upgrades like insulation, efficient heating, renewable energy systems, and other sustainability measures. 

The funding targets registered social housing providers, helping to address the 28% of homes with poor EPC ratings and the 10% that fail to meet the Decent Homes Standard. 

This partnership is designed to mobilise private capital into the sector, removing financing barriers and accelerating the UK’s transition to greener, more resilient housing

Read more on this insightful discussion.

ESMA releases proposed rules for regulation of ESG ratings providers 

ESMA published draft Regulatory Technical Standards (RTS)2 under the EU’s ESG Rating Regulation, detailing proposed rules for ESG ratings providers to improve transparency, reliability, and investor trust. 

The RTS outlines requirements for authorisation, conflict of interest safeguards, and mandatory disclosures, including methodologies, models, and key assumptions used in ESG ratings. 

The regulation responds to longstanding concerns about the ESG ratings sector’s lack of oversight, with ESMA now supervising providers to boost market integrity. 

A public consultation is open until June 20 2025, with ESMA aiming to publish its final report and submit the RTS to the European Commission for adoption by October 2025.

Read ESG Today report.

FMSB publishes Statement of Good Practice to support more consistent governance of sustainability-linked products 

The Financial Markets Standards Board (FMSB)3 published a global Statement of Good Practice (SoGP) for the governance of sustainability-linked products (SLPs)4, developed by a working group of experts chaired by our Head of Sustainable Finance Advisory, Caroline Haas. 

The SoGP aim to enhance credibility, consistency, and investor trust in SLPs, which are financial products tied to ESG performance targets via key performance indicators, offering flexible financing options unlike use-of-proceeds instruments. 

The SoGP outlines six core governance practices and is supported by a Risk Register identifying potential risks and mitigants, aligned with frameworks from ICMA, LMA, and ISDA. 

The guidance responds to rising concerns about greenwashing and weak governance of SLPs, aiming to increase market integrity.

Read the FMSB article. 
 

For further regulatory updates, please consult the NatWest monthly newsletter on Sustainability Policy and Regulation.

Companies continuing to increase climate ambitions despite headwinds: MSCI 

MSCI’s latest Transition Finance Tracker, has found that climate ambition among listed companies grew in 2024, with the share of companies with Science Based Targets initiative (SBTi)5-validated goals rising to 14.2%, up from 9.3% in 2023, despite slower overall growth in new climate commitments. 

The tracker assesses the climate change progress of companies within the MSCI All Country World Investable Market Index (ACWI IMI)6. Further findings include: 

• Decoupling of revenue and emissions was observed, especially in developed markets—revenues rose by nearly 50% between 2015–2023, while emissions fell by nearly 25%.
• Geographic divergence in emissions trends: Scope 1 emissions fell in the U.S., Japan, Germany, and the UK, while China’s emissions nearly doubled from 2015 to 2023. 
• Only 12% of companies are aligned with the 1.5°C climate goal per MSCI’s Implied Temperature Rise metric; most remain aligned with higher warming pathways, with a median of 2.7°C.
  Read ESG Today Report.

For analysis and information on the Primary Market, along with updates on the Secondary Market, please take a look at the full monthly newsletter on Market Insights. If you do not have access to Agile Markets, please  Contact us.

UK government looks to set new principles for “high integrity” carbon credits 

The UK government is strengthening voluntary carbon and nature markets to help British businesses trade carbon credits, diversify revenue, and unlock private finance for climate action under the Plan for Change. 

New principles will define what constitutes a “high-integrity” carbon credit, boosting trust, transparency, and proper use in sustainability reporting, helping the UK position itself as a global hub for green finance. 

The government’s consultation, open for 12 weeks, supports efforts to raise integrity and accelerate investment in nature and carbon markets, including through partnerships with organisations like VCMI and ICVCM.

Read the press release. 

Microsoft expands carbon removal agreement with Stockholm Exergi to record-breaking 500,000 tonnes per year 

Microsoft has expanded its agreement with Stockholm Exergi to remove over 5m tonnes of carbon over a decade.

The agreement also underscores Microsoft's commitment to achieving its 2030 carbon negative goals through innovative partnerships.

Read ESG Today article. 

Carbon credit markets expected to reach US$14bn in 2035 

Demand for carbon removal credits in voluntary markets is projected to surge, with market revenues expected to exceed $14bn by 2035.  

This growth reflects the increasing need for businesses to secure high-quality credits to implement effective climate strategies.

Read the article. 

European regulators go beyond ESMA list in naming rule enforcement 

European financial regulators are intensifying the enforcement of guidelines set by ESMA regarding the use of sustainability terms in fund names, potentially extending beyond the limited list provided by ESMA. 

Various national regulators, such as those in Austria and Belgium, plan to assess terms on a case-by-case basis, indicating a broader interpretation of terms that might imply ESG characteristics, while some regulators initially adhere strictly to the ESMA list. 

Investor response: DWS said half its ESG ETFs have made changes, while BlackRock renamed 56 of its funds ahead of the deadline. Amundi and Federated Hermes have also made name changes to their funds.
Read the News and Analytics provided by Responsible Investor.

Bloomberg, Cambridge developing fossil fuel expansion-excluded bond index 

 The University of Cambridge and Bloomberg are collaborating to create the first global bond index that excludes companies actively expanding their fossil fuel activities, set to launch later this year with investments totalling up to $760m from participating institutions, including the UN Joint Staff Pension Fund. 

This index aims to help asset managers and owners mitigate the risks associated with fossil fuel expansion by evaluating companies based on their current corporate behaviours rather than their industry classifications, allowing for potential inclusion of companies that are aligning with the Paris Agreement.

Read the Environmental Finance article. 

Regular articles from us on market-moving themes, and updates on what we are doing to further our ESG commitment. 

• How transition finance will drive decarbonisation of the UK economy
• NatWest’s 20th ‘What ESG investors want’ webinar
• EU Omnibus proposals – path to revision and simplification of sustainable finance legislation

Sustainability Solutions platform 

We’ve launched a new climate platform to help cut costs and support businesses in their transition to become more sustainable. The main features of the platform are a focus on lower emission vehicles and solar potential. The tool has a quick calculator function where businesses can gather quick costings and estimated savings and also generate in-depth solar reports to find tailored recommendations of local suppliers.

Explore the tool.

For the full monthly newsletter login to Market Insights. Don’t have access? Contact us here.

Or, for Corporates looking to discuss any of the above further, please reach out to our authors:

• Caroline Haas, Head of Sustainable Finance Advisory 
• Dr Arthur Krebbers, Managing Director, Sustainable Finance Advisory 
• Rui Zu, Sustainable Finance Advisory
• Thomas Gidman, Sustainable Finance Advisory
• Daniel Bressler, Sustainable Finance Advisory
• Helen Ferguson, Sustainable Finance Advisory
• Niceasia Mc Perry, Sustainable Finance Advisory
• Isabella Crack, Sustainable Finance Advisory
• Zeyno Yurddas, Sustainable Finance Advisory

1. NWF [1] National Wealth Fund
2. RTS [2] Regulatory Technical Standards
3. FMSB [3] The Financial Markets Standards Board
4. SLP [4] Sustainability-Linked Products
5. SBTi [5] Science Based Targets initiative
6. ACWI IMI [6] All Country World Investable Market Index