NatWest Group
RATING
SECTOR
Banking
WEBSITE
CONTACT
Natwest Bank.
135 Bishopsgate,
London EC2M 3UR
Tel: +44 121 695 9238
E-mail (CEO e-mail): alisonRos@natwest.com
STOCK EXCHANGE
LISTING
- MSCI rating was upgraded to AA in December 2020
- Included in the FTSE4Good Index
- C rating and Prime status in ISS ESG Survey
- Score of A- in the 2020 CDP Climate Change Survey
- A+ for Strategy and Governance on the UN-supported Principles for Responsible Investment
EMPLOYEES
59,900
DIRECTOR OF SUSTAINABLE BANKING
AWARDS
CONTENT SOURCE
FURTHER READING
NatWest Group
SECTIONS : Sustainability • Targets • Evaluation • Key Points • Overview
Company Activity
The National Westminster Bank Group, commonly known as NatWest, is a major retail and commercial bank in the United Kingdom. It was established in 1968 by the merger of National Provincial Bank and Westminster Bank. In 2000, it became part of The Royal Bank of Scotland Group, which was re-named NatWest Group in 2020.
NatWest Group provides banking products and related financial services. The Company’s segments include UK Personal Banking, Ulster Bank RoI, Commercial Banking, Private Banking, RBS International (RBSI) and NatWest Markets (NWM).
NatWest is considered one of the Big Four clearing banks in the UK. The bank has a large network of over 960 branches and 3,400 cash machines across Great Britain and offers 24-hour Action Line telephone and online banking services. Today, it has more than 7.5 million personal customers and 850,000 small business accounts.
Company Sustainability Activity
NatWest Group states in its report that it is committed to align its strategy with the UN Sustainable Development Goals and the 2015 Paris Agreement. A member of the United Nations Environment Programme Finance Initiative, NatWest Group became a founding signatory to the UN Principles for Responsible Banking in September 2019.
Indeed, in its report the Bank emphasizes their commitment towards UN-led initiatives such as the UN Global Compact, the UNEP FI Principles for Responsible Banking and the UN-supported Principles for Responsible Investment. NatWest Group has notably signed up to the Collective Commitment on Climate Action, pledging to align its services with the Paris objectives.
In order to meet the Paris objectives, NatWest Group has agreed to join several initiatives along with the ones mentioned above:
- The Science Based Targets Initiative
- Climate Group
- The Partnership for Carbon Accounting Financials
- On the Advisory Committee for the LSE Grantham Institute’s Banking on a Just Transition report
- Climate Action 100+
- The Banking Environment Initiative
- Sustainable Markets Initiative
- Equator Principles
- Taskforce on Nature-related Financial Disclosures
- Soft Commodities Compact
Internal Operations
- Natwest Group reports that it has met its Net Zero Carbon ambition across all internal operations in 2020. Moreover, it states that the bank’s priority is to become Climate Positive across operations by 2025. The group aims to reduce emissions from its own operations by a further 25% by 2025.
Green Finance
- NatWest Group has a Group Sustainable Banking Committee which oversees and challenges actions being taken by management in driving sustainable business practices by ensuring ESG ambitions and commitments to the UN Principles for Responsible Banking are being met.
- In 2019, NatWest launched its first Green, Social and Sustainability bond Framework. They state that its issuance was in line with the bank’s climate ambitions and purpose-led strategy. Aligning with International Capital Market Association’s Green Bond Principle, its proceeds of issuance are being allocated to renewable energy projects across the UK.
- NatWest has also issued social bonds. In 2021, the group issued a 1 billion pound affordable housing social bond in the aim of providing greater access to affordable housing in the UK.
- Moreover, NatWest has also integrated ESG principles into its advisory programme for its clients. The bank was the bookrunner on Burberry’s 300 million pound 5-year Sustainability bond and Clarion Funding’s 350 million 15-year Sustainability Bond for the UK Housing association Sector.
Highlights
- Achieved Net Zero Carbon across operations in 2020
- Over 14.1 billion pounds of lending approved through government schemes, with 300,000 applications approved
- New Supplier Charter sets out changs to improve ethical business conduct and human rights
- Supported the National Emergencies Trust Coronavirus Appeal with a total donation of 10 million pounds
- Edinburgh head office turned into a charity distribution hub helping Social Bite, Trussell Trust and Cyrenians to produce over 1 million meals for those in need since March 2020
- Published fourth annual Modern Slavery and Human Trafficking Statement and updated its Human Rights Statement
- Direct Community investment in 2020 amounted to 11 million pounds
- Launched a report on racial equity
- Climate goal, measures and targets are embedded into Executive Director and ExCo performance measures and remuneration decisions
- Virtual GP service for all colleagues
- Principle Banking Partner of COP26
- Provided 12 billion pounds to climate and sustainable funding and financing
- Leading lender to the UK renewables sector by number of transactions over the past 10 years
- First major UK bank to sign up for the Partnership for Carbon Accounting Financials and has signed the UNEP-FI Collective Commitment to Climate Action
- Adopted MoneySense, a financial education programme that streams live weekly financial literacy lessons and launched Island Saver, the world’s first free children’s financial education console game
- Launched a partnership with Octopus Energy, the UK’s fastest growing energy technology company to help make it simple for customers and colleagues to move to electric vehicles
Targets
- Decrease at least half of the climate impact from the bank’s financing activity
- Have 50% of UK and Ireland customer’s homes at or above EPC or equivalent rating by 2030
- Generate 20 billion pounds of additional funding and financing for climate and sustainable finance by 2021
- Increase Climate Positive operations by 2025
- Stop lending and underwriting to companies with more than 15% of activities related to coal and to all major oil and gas producers, unless they have a credible transition plan
- Reach 50,000 incremental new businesses by 2023 through inspiring and supporting 500,000 people
- 60% of targeted individuals for professional support programs should be female
- 75% of targeted individuals for professional support programs should be based outside London and the South East
- 20% of targeted individuals for professional support programs should be Black, Asian or minority ethnic
- 10% of targeted individuals for professional support programs should be social purpose-led
- Reach 2.5 million people through financial capability interactions each year
- Guide 2m additional customers to start saving by 2023
- Extend Social Mobility Apprenticeship Programme across the UK
- Reach 100% renewable electricity
- Zero Waste to Landfill in the UK and Ireland
- Reduce paper consumption by 70%
Progress
- 36% of Retail Banking mortgages in England and Wales are at or above EPC rating of C
- Has received 315 million pounds worth of Green Mortgages which are only available on the most energy efficient properties
- Generated 12 billion pounds worth of climate and sustainable funding and financing
- Helped clients issue 36 green bonds totalling 23 billion to support their environmental activities
- 36% of Retail Banking mortgages in England and Wales are at or above EPC rating of C
- Has received 315 million pounds worth of Green Mortgages which are only available on the most energy efficient properties
- Generated 12 billion pounds worth of climate and sustainable funding and financing
- Helped clients issue 36 green bonds totalling 23 billion to support their environmental activities
- Achieved Net Zero Carbon on direct operations
- Achieved interim target of 90% renewable electricity coverage
- Waste per FTE reduced from 4.2 kg/week to 3.4kg/week
- Reduced paper consumption by 56%
- Embedded the SDGs into Green, Social and Sustainability Bonds framework, and Climate and Sustainable Finance eligibility criteria
- Reinforced the importance of SDGs in 2020 updated Human Rights Statement, Modern Slavery and Human Traficking Statement and new Supplier Charter
- Highlighted the activity that can support the SDGs in case studies throughout 2020 Annual report and Accounts
- Joined the UN Global Compact‘s working groups on making Global Goals Local, and submitted a team to the 2021 Young SDG Innovator ten month accelerator programme
Certificates
UN Sustainable Development Goals
UN SDGs Compliance
SDG 4: Quality Education
- Adopted MoneySense, a financial education programme that streams live weekly financial literacy lessons and launched Island Saver, the world’s first free children’s financial education console game.
SDG 5: Gender Equality
- Committed to helping women in investment schemes (target of 60% helped professionally to be women).
SDG 7: Affordable and Clean Energy
- Committed to increase renewable energy and renewable electricity to 100%.
- Achieved Net Zero Carbon on direct operations.
- Achieved interim target of 90% renewable electricity coverage.
- Waste per FTE reduced from 4.2 kg/week to 3.4kg/week.
- Reduced paper consumption by 56%.
SDG 8: Decent Work and Economic Growth
- Over 14.1 billion pounds of lending approved through government schemes, with 300,000 applications approved.
SDG 12: Responsible Consumption and Production
- 36% of Retail Banking mortgages in England and Wales are at or above EPC rating of C.
- Has received 315 million pounds worth of Green Mortgages which are only available on the most energy efficient properties.
- Generated 12 billion pounds worth of climate and sustainable funding and financing.
- Helped clients issue 36 green bonds totaling 23 billion to support their environmental activities.
SDG 13: Climate Action
- Launched a partnership with Octopus Energy, the UK’s fastest growing energy technology company to help make it simple for customers and colleagues to move to electric vehicles.
SDG 17: Partnerships for the Goals
- Working with A Blueprint for Better Business, an independent charity which aims to create a better society through improved business practices.
- Joined the UN Global Compact‘s working groups on making Global Goals Local, and submitted a team to the 2021 Young SDG Innovator ten month accelerator program.
- First major UK bank to sign up for the Partnership for Carbon Accounting Financials and has signed the UNEP-FI Collective Commitment to Climate Action.
Evaluation
NatWest Group emphasizes its commitment to UN-led initiatives — specifically the UN SDGs — and has created partnerships with local and international organizations to meet these goals as well as the Paris Agreement objectives. Indeed, the bank is involved in a number of initiatives such as the Banking Environment Initiative or the UN Global Compact.
The bank has demonstrated some progress in reducing its environmental impact. It has notably achieved Net Zero Carbon in its operations and a level of 90% of electricity supplied by renewable energy.
Moreover, the bank is dedicated to pursue green finance as it has already launched social and environmental bonds such as the Green, Social and Sustainability bond Framework. The group states that it is committed to help its clients with green financial activities; for instance, the bank helped Burberry and Clarion Funding introduce their own green bonds.
NatWest Group does not hold any notable certificate besides The Carbon Trust Standard for Zero Waste to Landfill. However, it has made several note-worthy listings such as achieving an MSCI rating of AA and a score of A- in the CDP Climate Change survey. The only award mentioned in its report is the 2020 Reward & Employee Benefits Association Wellbeing Award.
Despite its sustainability initiatives, NatWest has contributed to the fossil fuel industry by investing $13.393 B since the adoption of the Paris Agreement. Although the bank decreased its investment from 2018 to 2019, NatWest increased its investment in the industry from 2019 to 2020.
This report gives NatWest Group a score of C.
Analyst Outlook: Positive
NatWest has demonstrated its progress in both internal and external operations. Unlike many banks which claim to be sustainable while still increasing or maintaining their levels of fossil fuel investments, NatWest has significantly decreased its relations with fossil fuel companies.
Moreover, NatWest group has formed numerous partnerships with different public and private organizations, such as its newest partnership with Microsoft.
The bank would benefit from being accredited with more notable certificates or awards (or had mentioned them in its report) and continuing to decrease its investment in the fossil fuel industry.
Key Points
- Sustainalytics gives NatWest Group a risk score of 20 (medium), which was not mentioned in the report.
- Announced a collaboration with technology giant Microsoft, aimed at helping UK businesses to better understand their carbon footprints and to create tailored action plans to reduce their carbon emissions leveraging digital technologies.
- 46th bank in UK fossil fuel financing rankings (low considering it is one of the top 4 banks in the UK).