Biodiversity and climate change

At NatWest Group we view climate change, natural resource scarcity, biodiversity loss, and their associated impacts, as significant dangers to the livelihoods of our customers and society at large, both now and in the years to come.

The United Nations Biodiversity Conference (COP15) was chaired by China and hosted by Canada in December 2022. COP15 concluded with the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF), which aims to address biodiversity loss, restore ecosystems and protect indigenous rights. The GBF also includes 23 targets to achieve before 2030, including mobilising public and private funding and requiring companies and financial institutions to monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity. As a purpose-led organisation, we know we need to play our part. 

Key activities during 2022 include:

Supporting customer transition to net zero:

  • Our climate and sustainable funding and financing inclusion criteria include lending to activities that protect and restore biodiversity, such as regenerative farming practices. The criteria define the activities that contribute to our target of providing £100 billion climate and sustainable funding and financing between 1 July 2021 and the end of 2025.
  • We advocated ambitious policy incentives, including environmental land management schemes, to reward sustainable farming practices towards net-zero targets and improve agricultural resilience to climate change(1). We were also pleased to continue our collaboration with the Global Farm Metric to help measure the sustainability of farming.

Helping to end the most harmful activities:

  • Continuing our long-standing management of soft commodities that are associated with a higher risk of deforestation, in December 2022 we updated our ESE risk acceptance criteria to clarify we intend to stop lending and loan underwriting to producers of soft commodities (such as palm oil, soy and cocoa) operating in tropical regions who have not obtained sustainable certification of their direct soft commodities activities and supply chain by 31 December 2024.
  • NatWest Group continues to voluntarily report against the soft commodities that have high deforestation-related risks for the UK, including rubber, cocoa, pulp and paper, leather and beef, palm oil, soy and timber.

Building powerful partnerships and collaborations:

  • We are working with Palladium to support Revere, a collaboration with UK National Parks that aims to increase investment in natural capital and help secure a sustainable future for the UK’s best-loved protected landscapes. Restoration projects generate nature-related income through the valuation and sale of ecosystem services.
  • We collaborated with University of Exeter’s ‘Renewing biodiversity through a people-in-nature approach’ (RENEW) project which works with landowners, businesses, and communities to restore woodlands, wetlands and farmland across England, Northern Ireland, Scotland and Wales – focusing on the role of business and financial decision-makers.

Getting our own house in order:

  • We purchased 120,000 tCO2e in carbon credits to mitigate our direct own operational emissions. These credits are assured under the Verified Carbon Standard and Triple Gold certified to the Climate, Community & Biodiversity Alliance Standards.

As well as this, in 2022, NatWest Group was proud to be awarded The Sustainable Markets Initiative’s 2022 Terra Carta Seal(2), recognising our work on, and momentum towards, the creation of sustainable markets. As we continue to increase our understanding of nature-related risks and opportunities, we recognise that collaboration with expert partners can deliver insight both for NatWest Group and the wider community.


(1) Refer to ‘Financing nature-positive transition in the agriculture sector’ (PDF 4090KB).

(2) See further details on the Terra Carta Seal.

Understanding nature-related financial risks

In April 2022 NatWest Group collaborated with the University of Cambridge Institute for Sustainability Leadership and Banking Environment Initiative to publish a nature-related financial risk use case focused on land degradation and UK farmers. As one of the UK’s largest lenders to the agricultural sector, we wanted to understand the potential financial risks to arable farming producers.

The use case indicated that some arable businesses on highly degraded land could suffer as much as a 40% reduction in crop yields following an extreme weather event such as a heatwave, while average declines would be approximately 5%. A second scenario examined the vulnerability of degraded land to a spike in fertiliser prices – a timely analysis given that UK farmers have seen Nature and Biodiversity Statement Forestry, Fisheries and Agribusiness Risk Acceptance Criteria Learn more about our approach to responsible lending and financing Soft Commodities Compact Reporting Climate and Sustainable Funding and Financing Inclusion Criteria fertiliser costs increase nearly three-fold in 2022 compared to 2021. While results showed that such a rise in prices would be largely mitigated by a commensurate increase in food prices, the second scenario highlighted benefits of positive land management practices.

While further research is required, future exploration can be integrated into the development of NatWest Group’s Global Farm Metric. This common framework of sustainability metrics and accompanying assessment tool will, once developed, enable farmers to measure their environmental and social impact. 

Related content

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

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. 

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