More clarity on sustainability strategy needed

Greenwashing concerns and sustainability capex were key investor concerns observed across sectors.

I. Key Themes

  • With increased scrutiny on greenwashing, investor interest in regulatory alignment was heightened especially in the context of issuance from regulated sectors. Key questions related to sustainability target setting, and understanding if sustainability ambitions would be rewarded by regulators.
  • For debut sustainability-linked issuance, investor focus was on structuring of mid-term targets, accountability for testing key performance indicators (KPIs) and related to the use of offsets. Similarly, in context of the consumer sector, investors were keen to know whether there is ranking of customers’ sustainability priorities and listing of any measures that help in influencing consumer behaviour.
  • For use of proceeds bonds, sustainability capex questions were most frequently raised across a variety of industries. New questions observed were related to capex usage from ringfenced funds, breakdown, proportion, and impact of net-zero targets on capex.
  • Biodiversity remains a popular topic for investors as observed in Q2 2023 with most questions targeted towards circular economy, reusability, and recycling.
  • Sustainability strategy (45%) had the highest share of questions and touched upon a wide variety of questions ranging from future labelled issuance plans, to passing sustainability-driven cost wins through to clients.


Split of questions by different topics

Notes: Based on 172 questions and feedback received in Q3 2023 Industrials, Transport, Utilities and Consumer Industries sectors. “Others” includes sustainable finance framework, ESG assessment, ESG ratings, and reporting.

Source: NatWest, ESG-related investor questions and feedback for corporates in Q3 2023.


Percentage of questions under each topic: Q3 2023 and Q2 2023

Notes: Based on 172 questions and feedback received in Q3 2023 for Industrials, Transport, Utilities and Consumer Industries sectors and 114 questions and feedback received in Q2 2023 principally from utilities sector. “Others” in Q3 2023 includes sustainable finance framework, ESG assessment, ESG ratings, reporting and in Q2 2023 includes reporting, ESG ratings, and sustainable finance framework categories.


Source: NatWest, ESG-related investor questions and feedback for corporates in Q3 2023 and Q2 2023.


II. Example questions and feedback

Issuer focused

Sustainability strategy

  • What are your ambitions regarding the ‘net-zero target’? Will it have an impact on your capex plans? How do you see capex evolution?
  • Consumer Industries: Are sustainability-driven cost wins passed through to clients?
  • Industrials: A consumer tends to throw away a box that is brand new and wonder if that is really needed – is that something that is being considered in your business model? i.e., reusability vs. recyclability and how regulation moves towards that?


Stakeholder relations

  • Where would you rank sustainability in terms of clients’ priorities
  • Transport: If you have customers who are wanting to move to electric vehicles – would they purchase the components of the electric vehicles and who would control the maintenance?

Instrument focused

Sustainability KPIs

  • Transport: How much of the % reduction in emissions will be from supply chain, and how much comes from things you can directly control?
  • Utilities: In relation to Scope 2 emissions and leaks, whilst this is not quite in the public eye as in other sectors, it has the potential to be. What are you doing to bring down gas leaks and what have been your discussions with the regulator to persuade them on what needs to be done?
  • Do you have any nearer term targets than your Sustainability-Linked Bond (SLB) target in 2030? Is this a straight-line progress to 2030 or more progress sooner rather than later?


Alignment with standards

  • Utilities: With public scrutiny on entities and the pressure on Ofwat, do you think you might see something similar from Ofgem in relation to environmental commitments? Do you think increased costs will be passed on to customers?
  • Industrials: Given the new EU regulations on 100% deforestation-free, how is your business impacted?
  • Do you get any credit from the regulator for the work you are doing on sustainability or with the sustainability-linked bond framework?


Sustainability projects

  • How do you intend to refinance your past expenditures. Do you have an indication on the balance of allocation between the split across the green framework. Percentage of refinancing and new financing i.e. satisfying the Use of Proceeds (UoP)?
  • Is the agenda pre-set or is the committee genuinely going through and making the decisions about which projects to include? How are those decisions made throughout the year?
  • Is the sustainability capex from ringfenced funds? How will proceeds be used?


Bond characteristics

  • Did you think about SLB rather than UoP?
  • You mentioned your ESG targets but is it not logical to issue SLB with targets in place for medium term (2030 targets), which would fit for 8-year tenor?

III. Appendix

Alignment with standards  

This includes all questions associated with (but not limited to) alignment with:

  • The Sustainable Development Goals (SDGs)
  • The EU Taxonomy
  • The European Green Bond Standard (EUGBS)
  • The Science Based Targets initiative (SBTi)
  • The International Capital Market Association (ICMA) Bond Principles
  • Regulations by industry-level bodies
  • Other regulatory


Bond characteristics

This includes all questions associated with (but not limited to) the structure (tenor, pricing, etc.) and the choice of the bond type (e.g. conventional, green, sustainability-linked, etc.).


ESG assessment      

This includes all questions associated with (but not limited to) environmental and other assessments conducted by the issuer.



This includes all questions associated with (but not limited to):

  • Reporting of impact metrics
  • Reporting of impacts, methodologies, and assumptions of indicators
  • Reporting of progress on KPIs or historical performance
  • Frequency of reporting


ESG ratings

This includes all questions associated with (but not limited to):

  • Rationale behind choosing the Second Party Opinions (SPO) provider
  • Feedback by the SPO provider
  • ESG ratings reports


Stakeholder relations

This includes all questions associated with (but not limited to):

  • Supplier compliance with ESG
  • Customer compliance with ESG

Sustainability KPIs

This includes all questions associated with (but not limited to):

  • Selection of KPIs
  • Impacts, methodologies, and assumptions of indicators

Sustainability projects  


This includes all questions associated with (but not limited to):

  • Projects eligible for UoP
  • Eligibility criteria
  • Rationale behind projects evaluation and selection
  • Management of proceeds


Sustainability strategy        

This includes all questions associated with (but not limited to) the issuer’s broad ESG strategy (both current and future), approach towards sustainability, and firm-wide policies.


Sustainable finance framework

This includes all questions associated with (but not limited to) the structure of the framework.




This includes all questions associated with (but not limited to) assurance and auditing for the framework.


We’ll provide regular updates on frequently asked questions posed by investors, to keep you up-to-speed with their most current views. So, please do regularly check our Insights Hub for updates.

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