NatWest sets objective to dispense £200 billion in climate and transition financing by 2030
NatWest Announces New Climate and Transition Finance Framework
UK-based financial services company NatWest Group has unveiled a new Climate and Transition Finance Framework, replacing its prior Climate and Sustainable Funding and Financing framework. This new initiative aims to provide £200 billion in climate and transition finance between July 2025 and the end of 2030 [1].
The new framework defines transition finance as financing and facilitation of assets, activities, acquisition targets, and companies that contribute to the removal or life-cycle emission reduction of greenhouse gas (GHG) emissions, with a focus on carbon-intensive and hard-to-abate sectors. It supports the transition towards net zero by 2050 without impeding the development and deployment of low or zero carbon alternatives or locking in carbon-intensive assets beyond 2050 [1].
James Close, Head of Climate Change at NatWest Group, stated that the new framework will enable the support of the real economy's alignment and transition towards net zero in line with the 2015 Paris Agreement [1]. This new goal marks a significant increase from NatWest's prior target of £100 billion and includes transition finance, which was not a part of the prior goal [1].
The framework outlines definitions, eligibility, and guiding principles for classifying financing and facilitation activities that count towards the goal. It covers a broad spectrum of industries, including those that are emission-intensive and difficult to decarbonize, to enable financing that supports the real economy’s alignment with the Paris Agreement climate goals [1][2].
Key sectors and their classifications in the framework include:
- Transport Sector: Eligible climate finance activities include sustainable low carbon transportation such as electric cars, electric buses, and micro-mobility. Eligible transition finance activities involve heavy-duty fleet upgrades to enable alternative fuel usage, including biofuels, synthetic e-fuels, and hydrogen. Exclusions include logistics and transport services related to fossil fuel activities [1].
- Technological and Industrial Sectors: NatWest also targets financing for emerging climate technologies such as Bioenergy with Carbon Capture and Storage (BECCS), Sustainable Aviation Fuel (SAF), ammonia as a clean fuel, direct air carbon capture and storage, and similar innovations that contribute to emission reduction in hard-to-abate sectors [3][1].
The new goal will focus on industries delivering climate solutions and hard-to-abate sectors like iron & steel, cement, petrochemicals, shipping, and aviation. The framework contributes to the investment required in industries delivering climate solutions and across a broader spectrum of industries, instruments, and counterparties, including the hard-to-abate and emission-intensive sectors [1].
NatWest has already surpassed its prior target, reaching over £110 billion at the end of the most recent quarter [1]. The new framework reflects a significant increase in ambition and is aimed at supporting NatWest's net zero ambition by providing financing and facilitation options to help its clients reach their own climate and transition ambitions. NatWest has targets in place to achieve net zero by 2050 across its financed emissions and assets under management, as well as in its own operational value chain [1][2][5].
- NatWest's new Climate and Transition Finance Framework focuses on providing £200 billion in finance for climate solutions and hard-to-abate sectors, such as iron & steel, cement, petrochemicals, shipping, and aviation, between 2025 and 2030.
- The Transport Sector is a key area of focus within the new framework, with sustainable low carbon transportation like electric cars and buses considered eligible for climate finance, while heavy-duty fleet upgrades to enable alternative fuel usage are eligible for transition finance.
- The framework also supports financing for emerging climate technologies like Bioenergy with Carbon Capture and Storage (BECCS), Sustainable Aviation Fuel (SAF), ammonia as a clean fuel, and direct air carbon capture and storage.
- James Close, Head of Climate Change at NatWest Group, stated that the new framework will help the real economy transition towards net zero in line with the 2015 Paris Agreement, marking a significant increase from NatWest's prior target of £100 billion.
