At a time when many records for extreme climate are being broken (for the wrong reasons), NatWest recently gathered industry leaders, policymakers, and financial professionals to discuss not just the challenges of decarbonisation, but the opportunities. 

With the urgency of transitioning to a low-carbon or Net Zero economy upon the UK, the role played by finance, businesses, and the public sector is naturally in focus – reflected by the results of our audience polling in the auditorium. 

In one of the keynote speeches attendees heard that sustainability should remain a priority, irrespective of political change – an endeavour that NatWest is helping its customers with. A case in point is the National Wealth Fund, which in collaboration with the Green Finance Institute, is seen as a crucial driver of capital flow towards a sustainable economy in the long term. Three-quarters of surveyed businesses acknowledge that investing in sustainability delivers a competitive advantage, and it is an aim of the UK financial sector to provide tailored products to support the transition.

Audience poll: 34% chose ‘stimulation of the demand side’ as their wish for governmental support for decarbonisation in the real economy

With the UK’s goal for Net Zero still set at 2050, the discussion turned towards renewable generation, network storage, transport electrification, and industrial decarbonisation. 

Despite representing only 1% of global emissions, the UK’s role in climate action is deemed crucial due to its historical emissions and influence on global investment. Lest we overlook that the scientific consensus is that without immediate action, global warming will reach 2ºC within a decade, increasing the likelihood of climate tipping points.

With such stark, stern warnings upon us, it is worth noting that clean energy is already cost-competitive, with two-thirds of emissions expected to be mitigated by cheaper renewables within the next decade. 

The UK government has pledged to accelerate clean energy projects, with the National Grid planning an investment of more than £200bn by 2030 to support infrastructure expansion. However, challenges remain, including grid connectivity delays and outdated regulatory frameworks.

Investment in energy storage and flexible solutions was highlighted as a key enabler of the transition, alongside the development of long-term Contracts for Difference (CFDs) to stabilise electricity prices. Additionally, geopolitical shifts were discussed, with concerns over dependence on China for renewable energy supply chains and the rising cost of capital in developing markets.

Later in the day a panel discussion addressed the mobilisation of private capital for climate action, stressing the need for economic incentives and policy clarity. The insurance industry was identified as a crucial player in de-risking renewable energy projects, providing contingent capital, and improving financial reporting transparency.

Audience poll: Only 12% think that lack of maturity in the sustainable capital markets is the biggest barrier to the fight against climate change

London’s insurance market, the largest globally, was identified as a potential lead in setting international standards for climate finance. Panellists also explored ways to make sustainable investments more profitable, with funds like the Transition Materials Fund targeting critical resources such as lithium and nickel.

The UK’s efforts to decarbonise hard-to-abate sectors were examined in relation to carbon capture and storage (CCS). Experts discussed the affordability of Bioenergy with Carbon Capture and Storage (BECCS) as a long-term solution, estimating that it could remove up to 25 million tons of CO2 annually by 2050.

A notable example is the Drax power station’s transformation into a biomass-powered facility exemplifies the UK’s commitment to high-quality carbon removal. However, infrastructure development, government funding, and regulatory clarity remain essential for scaling CCS projects.

Audience poll: 42% know why CCS is important and how it will help in the transition to decarbonise

With carbon credits growing in popularity, investors are keen to integrate them into portfolio strategies. To this end, NatWest and eight other major banks have invested in Carbonplace, a digital carbon credit trading platform. This initiative aims to improve transparency and accessibility in the voluntary carbon market, addressing past challenges related to credit quality and market stability.

Delegates heard how the UK government’s green bond programme, launched in 2021, is a model for aligning financial instruments with sustainability objectives, raising funds for clean transportation, renewable energy, and biodiversity conservation. And the government-led Transition Finance Market Review aims to establish the UK as a global hub for financing the energy transition, with an emphasis on policy certainty and demand-side stimulation.

One of the major takeaways was the necessity for long-term regulatory frameworks to attract institutional investors. The government’s role in providing strategic public finance was emphasised, particularly in areas such as offshore wind and hydrogen infrastructure.

The event concluded with a call to action for financial institutions, policymakers, and businesses to act over the next five years – a critical period in determining the UK’s ability to meet its clean power and Net Zero targets. Strategic investment, regulatory clarity, and public-private partnerships, it seems, will drive the country’s decarbonisation as 2050 approaches.

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