What is NatWest’s US$268bn Strategy for Climate Finance?

NatWest says it is actively working towards sustainability, committing to reduce carbon emissions, support communities and provide sustainable finance.

NatWest Group has unveiled its Climate and Transition Finance (CTF) Framework and an ambitious £200bn (US$268.3bn) target to be delivered between 1 July 2025 and 31 December 2030. 

This is an evolution from its previous Climate and Sustainable Funding and Financing (CSFF) programme.

A new chapter for NatWest

In its 2024 Sustainability Report, Paul Thwaite, Group Chief Executive Officer, said: “We have evolved our purpose to reflect the role we play for our customers: the bank that turns possibilities into progress.

“By connecting our purpose more closely to the job our colleagues do each day we aim to have a positive impact on our communities, the environment and our own sustainability over the longer term.

“Achieving our 2030 ambition for Scope 3 financed emissions is increasingly challenging due to our acknowledged dependence on timely and appropriate government policy, technology developments and the supplier, customer and societal response required to support the transition. 

“The path to achieving net zero by 2050 is far from clear at this stage but we continue to focus on supporting our customers’ transition and our own ambitions to be net zero.”

Introducing the CTF framework

The CTF Framework, launched in July 2025, introduces a revised structure for how NatWest will classify, track and report on climate-related lending and investment. 

The £200bn (US$268bn) target will be delivered between 1 July 2025 and 31 December 2030 and will build on the Group’s nearly-fulfilled CSFF goal of £100bn (US$134bn) by 2025, of which £93.4bn (US$125bn) had been deployed by the end of 2024.

“We also recognise that we need to do more to support the transition and that, collectively, we need greater harmonisation of the targets,” writes James Close, Head of Climate Change at NatWest Group, on LinkedIn.

“That’s why we’ve taken inspiration from the work of Glasgow Financial Alliance for Net Zero (GFANZ) and the UK’s TFMR to evolve the CSFF target into a CTF target that will have the same level of ambition and integrity, while acknowledging the importance of transition finance in conjunction with climate solutions.

“This will enable us to support the real economy alignment and transition towards net zero in line with the 2015 Paris Agreement.”

What’s included in the framework?

NatWest says the CTF Framework is designed to reflect the complexity of real-economy transitions. 

It covers two pillars:

1. Climate Finance

This stream will support activities that directly address climate mitigation or adaptation, including:

• Renewable energy (wind, solar, geothermal, hydro and green hydrogen)
  
• Energy efficiency technologies and retrofits
  
• Electric vehicles and EV infrastructure
  
• Low-carbon buildings meeting strict EPC or BREEAM standards
  
• Biodiversity restoration and ecosystem resilience projects.

2. Transition Finance

This reflects support for high-emitting sectors that need capital to decarbonise. It includes:

• Retrofitting industrial sites with carbon capture and storage (CCS)
  
• Supporting the use of blue hydrogen and sustainable aviation fuels
  
• Helping customers shift from fossil-heavy to alternative low-carbon fuels
  
• Heavy transport fleet conversions (HGVs, shipping and aviation)
  
• Nuclear and bioenergy with CCS where aligned to climate pathways.

All projects must adhere to robust eligibility assessments and align with science-based transition pathways, such as those set out by the International Energy Agency or the UK Climate Change Committee.

NatWest’s net zero strategy

Beyond financing, NatWest is embedding climate and nature considerations across its strategy, with initiatives such as:

• Carbon Planner and Home Energy Hub to support SMEs and households
  
• Supply chain emissions engagement via CDP’s supply chain module
  
• Training 30,000 colleagues on climate risk and opportunities
  
• Support for the National Wealth Fund and the UK Government’s Clean Power Action Plan.

NatWest has also achieved a 51% reduction in its direct operational emissions and aims for a 70% cut in Scope 1 and 2 emissions by 2030, while continuing to source 100% renewable electricity for its operations.

The future of finance

NatWest acknowledges the UK's evolving policy landscape as both a dependency and a catalyst. 

The CTF target is not just an internal ambition but a lever for market-wide collaboration, with government, industry and customers alike.

The bank has committed to reviewing its targets in 2025 in light of the UK CCC’s Seventh Carbon Budget, due in February that year, to ensure alignment with the latest national and international climate strategies.