NatWest: The transformative power of Sustainable Banking

07 Jul 2022 . 3 minutes

“The journey to net-zero can be very challenging and sometimes frustrating but it’s worth fighting for,” Dr Maria Carvalho, NatWest Group’s Head of Climate Economics and Data, concluded during the Net Zero Summit of the Business Services Association. The online conference brought together representatives from businesses, government and VCSE organisations to discuss how they can successfully promote and achieve net-zero.

Incentivising customers to make a positive change

Pointing to the crucial role that banks play in financing the transition to a net-zero economy, Dr Carvalho stressed the importance of identifying the best ways to engage and motivate customers to think about climate, and the additional tools and services being provided for customers alongside financing instruments as they set-off on their net-zero journey.

In this context, Dr Carvalho presented key initiatives, incentives and tools that NatWest has launched to support retail and commercial customers to make a positive change (see Chart 1); amongst them a ‘Carbon footprint tracking pilot’ to allow SMEs to track their carbon footprint as well as that of their supply chain partners.

Chart 1: Supporting customers to make positive change

Source: NatWest Group

Supporting customers with
£100 billion of Climate and Sustainable Funding

The Head of Climate Economics & Data outlined NatWest Group’s interim net-zero targets in order to achieve Net Zero of its Scope 1, 2 and 3 emissions by 2050 – highlighting the transformative power of banks through reducing the climate impact of their financing activities – NatWest Group aims to reduce the climate impact of its financing activity by 50% by 2030 as well as to fully phase-out coal financing in the same year.

Dr Carvalho also pointed to NatWest Group’s £100 billion target for Climate and Sustainable Funding in the period 2021-2025, underlining the bank’s passion and commitment to help achieve a net-zero economy.

Chart 2: NatWest Group – financing solutions for the real economy

Our purpose is to reach our net zero target by supporting our clients to decarbonise:

Source: NatWest Group (2021) Climate Related Financial Disclosure Report (PDF)

NatWest Group’s lessons in reaching net zero targets

Dr Carvalho struck a very positive note about the transition to net-zero – despite its challenges – talking about NatWest Group’s three key learnings since embarking on its sustainability journey:

A net-zero economy is worth investing in: the cost-of-living crisis and the war in Ukraine are both stark, current examples demonstrating that global economies need to go down a different path to ensure energy security and prosperity, Dr Carvalho commented. Therefore, the transition to net-zero should not be considered a cost but an investment to achieve a cleaner as well as safer, sustainable economy. It is the economy of the future, and it’s an economy we all want to live in.
Economic transformation requires alignment between economic sectors, policy and markets to drive systemic change: “We have looked at what we can do as a bank and where we need to connect with others to drive change”, Dr Carvalho said, pointing to the fact that net-zero can only be achieved as a ‘team effort’ in partnership with many stakeholders.
One Bank, purpose-led approach requires the integration of our financial budget planning with our carbon budget – and we need granular data to optimise our decision-making. Dr Carvalho pointed to NatWest Group’s early learning that it can only achieve its net-zero target if the financial budget and carbon budget are aligned: “We had to apply a completely different thinking and needed to gather very different data, but now that we are on the journey it is fascinating and exciting, and we’re committed to continually provide clever tools and services to our customers to help them achieve net-zero too.”

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Go Green Hub: https://www.natwest.com/business/green-banking.html

Carbon footprint tracking tool: The bank’s Carbon footprint tracking tool is not currently available for general use, but is being piloted with 500 customers. The pilot is currently not accepting new users. Terms and conditions apply. We use Open Banking to connect your account and analyse your transaction data.

Future mobility: https://www.natwest.com/business/green-banking/charging-ahead-to-net-zero.html
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