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Nature and climate change

Our evolving approach to nature

We view climate change, the continued significant global decline in nature and biodiversity and resource scarcity as likely to impact our customers and society at large, both today and in the years to come.

Working to embed nature into our existing approach

Climate change and nature loss are inextricably linked, and each requires immediate and significant action to avert potentially irreversible impacts.1

Our approach at NatWest Group is to integrate nature into our existing climate approach over a number of years. We remain in the early stages of understanding our nature-related risks and opportunities, based on first generation portfolio, counterparty and own operations analysis.

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(1) IBES-IPCC co-sponsored workshop on biodiversity and climate change – workshop report.

Enhancing our understanding

In 2024, we undertook an initial assessment of our nature-related impacts and dependencies at a NatWest Group level using the Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE)2 tool to explore our wholesale portfolio. 

We performed a basic output aggregation to give a sector view of potential nature-related dependencies and impacts across our wholesale portfolio. The heatmap below shows the seven most material sectors. 

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(2) ENCORE, developed by UN Environment Programme (UNEP)-World Conservation Monitoring Centre, UNEP Finance Initiative and Global Canopy, provides an illustration of how different sectors impact and depend on nature.

The assessment helped us to select three sectors, representing a cross section of our portfolio, for a bottom-up Locate, Evaluate, Assess and Prepare (LEAP) pilot assessment in 2024. These sectors – agriculture, commercial real estate (CRE) and power utilities – were selected by considering ENCORE results, balance sheet exposure and asset quality credit factors. Refer to page 62 of the 2024 Sustainability Report for further details.

In addition to work at the NatWest Group level, our Netherlands-headquartered European subsidiary, NatWest Markets N.V., continued to develop its response European environmental regulation. Refer to page 38 of the 2024 Sustainability Report. 

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(2) Food and consumer includes food and drink manufacturing and processing activities as well as other consumer products such as soaps, perfumes and tobacco products.  

(3) The aggregation is based on the use of a simple arithmetic mean of all available impacts and dependencies. 

 

Customer engagement

Ahead of COP16,3 NatWest Group hosted a customer event in London entitled ‘The path to COP16: Mobilising private finance for nature. Private finance, NGOs and academia shared their perspectives on how private finance can support protection, restoration, and regeneration of nature.

Nature-related considerations, such as regenerative agriculture, are already integrated into our climate and sustainable funding and financing inclusion (CSFFI) criteria. 

Our Forestry, Fisheries, and Agribusiness Risk Acceptance Criteria prohibit funding to producers of deforestation risk-related commodities where they lack sustainable certification of their activities and supply chain by 31 December 2024. Direct engagement was undertaken throughout the year with some customers where the required certification status was unclear. As a result, we can confirm all customers deemed in-scope for assessment met our certification requirements, or suitable equivalents, by 31 December 2024.

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(3) The 2024 United Nations Biodiversity Conference of the Parties (COP16) to the UN Convention on Biological Diversity (CBD).

Learn more about our approach to responsible lending and financing:

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Collaborating for nature

In 2024, we contributed to the Cambridge Institute for Sustainability Leadership’s (CISL) report on ‘Scaling Finance for Nature’. 

We also collaborated with the University of Exeter in a pilot study to assess the nature footprint of our direct own operations and supply chain. Refer to page 63 of the 2024 Sustainability Report for further detail. 

Internal engagement

We continue to support colleagues with enhancing their knowledge of nature. In partnership with the University of Edinburgh, we co-developed bite size nature-based training modules available to all colleagues.

 

Nature in Our Own Operations

In 2024, we collaborated with the University of Exeter’s RENEW programme, participating in an experimental pilot study to measure the UK biodiversity footprint of our direct own operations and supply chain.

RENEW is a five-year collaboration aimed at developing solutions for the renewal of biodiversity. The aim of the pilot was to evaluate the impact of our direct own operations and supply chain on UK biodiversity, based on 2019, 2022 and 2023 consumption data used for our emissions reporting.  

Overall, biodiversity impact reduced by more than 50%4 between 2019 and 2023, driven by efforts to decarbonise our direct own operations. Electricity, paper consumption, business travel, employee commuting and waste contributed more than 90% of the overall impact. 

 

Further to work to reduce waste5, we focused on plastic waste associated with our UK direct own operations. Analysis revealed that an estimated 63% of plastic waste was associated with employees commuting by car, with waste generated through car production, servicing and road maintenance identified as material contributors. 

We aim to use the values to help gauge progress in our efforts to operate more sustainably.

For more information, please see Own operational footprint and page 63 of our 2024 Sustainability Report. 

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(4) 50% reduction in direct own operations PDF arises from our estimated outputs, which due to the limitations outlined above should not be compared with outputs from alternative models. 

(5) Waste included in the heatmap refers to physical waste recorded across our UK locations and forms our Scope 3 category 5 emissions. Waste within our plastic assessment includes car production impact associated with employee commuting.

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Our approach to climate change

Read more about our ambition to become net zero by 2050, our approach and progress highlights.

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Climate and sustainable funding and financing

Read more about our  ambition to play a leading role in championing climate solutions by supporting its customers’ transition towards a net-zero through Climate and Sustainable Funding and Financing. 

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Our own operational footprint

Read more about our ambition to halve our direct own operations emissions by 2025 from a 2019 baseline, and our underlying progress. 

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