NatWest Pledges £200 Billion to Climate and Green Transition Finance by 2030

NatWest Group, the British banking and insurance heavyweight, is doubling down on its climate ambitions. After surpassing its previous target of facilitating £100 billion in sustainable finance ahead of schedule, the Group has now committed to mobilising a staggering £200 billion in climate and low-carbon transition-related funding and financing between July 2025 and the end of 2030.

The announcement signals more than just a numbers game. It marks a strategic evolution. By the close of June 2025, NatWest had already delivered £110 billion under its earlier definition of “climate and sustainable finance”, a framework that aligned with the United Nations’ Sustainable Development Goals and encompassed a broad swathe of activities: renewable energy projects, agricultural water stewardship, building efficiency upgrades, pollution control, and the electrification of heating and transport systems, to name a few.

But as the climate crisis deepens and the economic levers for transition become more sophisticated, so too has NatWest’s framework. The bank is now adopting a new Climate and Transition Finance (CTF) Framework, setting the bar higher and refining its methodology.

The shift comes in the wake of a controversial move by the UK Government to scrap plans for a green finance taxonomy, a decision that drew heavy criticism from transition finance experts. In the absence of a government-led classification, NatWest has taken the initiative to create clear-cut definitions of what qualifies as climate finance, what falls under the umbrella of transition finance, and what doesn’t meet the criteria.

Each sector now has tailored inclusion and exclusion criteria. In industrial processes, for instance, funding for electric arc furnaces or steel production using recycled scrap is categorised under “climate finance.” Meanwhile, projects utilising blue hydrogen, produced from natural gas with carbon capture, fall under “transition finance.”

However, the Group draws a hard line at unabated fossil fuels and grey hydrogen (fossil-fuel-derived hydrogen with no carbon capture), which are firmly excluded from the definition of the CTF. This logic extends across sectors, including power, agriculture, transport, carbon removals, and critical minerals.

Transition activities are defined as those which “directly or indirectly contribute to the removal or life-cycle reduction of GHG emissions and support our customers’ transition towards net-zero by 2050, while not impeding the development and deployment of low or zero-carbon alternatives or leading to a lock-in of carbon-intensive assets beyond 2050”.

The framework is built atop respected benchmarks such as the UK’s Climate Change Committee’s “Balanced Pathway” to net zero by 2050, and the International Energy Agency’s roadmap to a net-zero global energy system.

NatWest is not taking a one-size-fits-all approach. In the case of climate finance, it will apply a “pure player” focus, meaning it will only support businesses and projects whose core aim is climate mitigation. For transition finance, it adopts an “entity-level” lens, examining the full spectrum of a company’s operations and asset mix.

The scope of what gets counted is wide-ranging, from mortgages and corporate loans to project financing, securitisation, and underwriting for both debt and equity. But there’s a catch: for a general financing deal to qualify as climate-aligned, at least 90% of the recipient’s revenue or assets must stem from climate finance–defined activities.

When it comes to transition finance, the bank has published clear eligibility and customer assessment criteria to ensure integrity and alignment with its stated goals.

The criteria state: “We recognise the breadth of our customer base and the need to remain inclusive and supportive of the transition for as many businesses as possible. Accordingly, we plan to take a measured and proportionate approach to transition finance eligibility and customer assessment.”