NatWest bank has amended its policy around fossil fuels investment, opening the door to them continuing to finance oil and gas, a new investigation from The Independent has found.
The findings raise serious questions around the bank’s formerly-pioneering oil and gas policy, and opens it up to accusations of greenwashing, according to campaigners.
In 2021, NatWest stated that it would “stop lending and underwriting to major oil & gas producers unless they have a credible transition plan, aligned with the 2015 Paris Agreement, in place by the end of 2021”. The commitment was also confirmed by a bank spokesperson at its AGM that year. The Paris Agreement was a landmark deal agreed at United Nations Climate Change Conference in 2015 aimed at significantly strengthening the global response to the threat of the climate crisis.
However, an updated version of NatWest’s Oil & Gas “Risk Acceptance Criteria” shows subtle changes to its pioneering policy.
Notably, the bank has added a footnote to a restriction on “Companies classified as oil and gas Majors that had a credible transition plan aligned with the 2015 Paris Agreement in place” that states: “*as assessed by our point in time credible transition plan assessment methodology undertaken in 2021”. The footnote did not exist in the 2024 version of the document.
The same document also contains two instances where NatWest has replaced “have” with “had” when describing whether oil and gas companies “have” or “had” transition plans aligned with the Paris Agreement. These amendments mean that oil companies would have to have had a Paris-aligned strategy in the past for NatWest to invest – but would not need to do so any more.
The International Energy Agency (IEA) – the global body overseeing countries’ energy policies – has previously suggested a Paris Agreement-aligned pathway of Net Zero by 2050 would mean that there should be “no new financing” for fossil fuel projects.
Banks are seen by campaigners as key props for the world’s oil and gas industry, providing financing for new oil exploration and drilling projects. In 2023, the world’s 60 biggest banks globally committed $705 billion (£527bn) to companies conducting business in fossil fuels, according to a report from the Rainforest Action Network environmental group. That brought the total since the landmark Paris Agreement in 2015 to $6.9 trillion.
NatWest – a sponsor of the UK-hosted COP26 climate conference in Glasgow in 2021 – has developed a reputation for being relatively progressive on fossil fuels in recent years.
The bank was one of the first financial institutions in Europe to commit to net zero emissions by 2050, and is one of the only banks in Europe to have committed to halving its operational emissions by 50 per cent by 2030.
NatWest’s 2024 Sustainability Report details a target of reducing emissions intensity in its oil and gas investments by 38 per cent in 2030 compared to a 2019 – though while the bank was on track to meet this target in 2022, in 2023 it was off track by more than 5 per cent, according to the bank’s report.
The publication of the amendments from NatWest came in the same month that oil major BP – who have been lent funds by NatWest –weakened its own net zero policies.
Back in 2020, BP promised to reinvent itself as a net zero energy company, pledging to cut oil and gas production by 40 per cent by 2030, and focus investments on low-carbon solutions. At the time the policy was described as a “big step forward” by climate think tank Carbon Tracker.
By 2023, however, BP had watered down its targets, raising its oil production target in 2030 by 25 per cent. Then in February this year, a new strategy pulled the plug on plans to become a net zero energy company, with CEO Murray Auchincloss saying the 2020 plan went “too far, too fast”.
In Response to the findings from The Independent, a spokesperson for NatWest said that it “would not comment on individual customers”, and defended the company’s broader oil and gas strategy.
“NatWest’s total exposure to the Oil and Gas sector remains limited and amounts to 0.5 per cent of the Bank’s financing activity,” the spokesperson said.
“The UK’s energy transition is dependent on many evolving factors – be that policy, technology or societal response – and we confirmed in our sustainability report earlier this year that we would review our climate targets during 2025, ensuring our policies and frameworks are aligned to the UK’s broader transition outlook.
“We will continue to be transparent on our policy and risk criteria in this area and will publish these once the review is completed.”
Jeanne Martin, head of banking programme at campaigning organisation ShareAction, told The Independent that NatWest has opened itself up to accusations of greenwashing.
“NatWest had a history of setting high standards in the industry, and its previous policy from 2021 was really positive,” she said.
“Now, though, the bank seems to be clinging to its final fossil fuel customers in a way that does not really make sense, as the bank’s exposure is so small,” she continued.
“It is being misleading, creating a loophole to continue financing oil and gas for short term profits, and has opened itself up to accusations of greenwashing.”
Ms Martin pointed to Barclays – a bank with far greater investment footprint in fossil fuels – as an example of a financial institution that nonetheless appears to be following through on its fossil fuels restrictions strategy.
“Barclays is one of the largest providers of financing to the fossil fuel industry, but so far they have stuck to their climate commitments, announcing that they will publish a transition plan by the end of the year, and also moving from being the number one financier of oil sands in Europe to cutting ties with the sector,” she said.
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