Environmental, Social & Ethical (ESE) and Reputational Risk Management

Prohibited

• Companies using child labour, forced labour, modern slavery or human trafficking.
• Owners/operators of brothels, businesses facilitating prostitution and adult massage parlours.
• Online pornography except ‘on-demand programme services’ regulated by Ofcom.
• Sale and/or advertising of sexual services (including sex clubs, escort agencies, ‘mail-order marriages’ and sex tourism).
• ‘Adult’ dating sites and applications where the primary purpose is some form of sexual entertainment or sexual contact.
• Sex chatlines/chatrooms (TV, internet or telephonic).
• Sexual entertainment venues, including lap dancing, pole dancing, table dancing, strip shows, peep shows, live sex shows.
• Unlicensed brick and mortar sex shops.
• Production of Pornography.
• Sex Cinemas.

For more information see Adult Entertainment ESE RAC (PDF 117 KB)

Prohibited

• Companies using Forced Labour, Modern Slavery or Human Trafficking
• Testing on Great Apes (Chimpanzees, Bonobos, Gorillas and Orangutans)
• Testing on Critically Endangered, Endangered and Vulnerable Species (International Union for Conservation of Nature (IUCN) Red List of threatened species)
• Testing of cosmetic products on animals except where required by regulatory authorities for human safety purposes and the company can demonstrate it is actively supporting the use of alternatives to animal testing.
• Testing tobacco products on animals except where required by regulatory authorities for human safety purposes and the company can demonstrate it is actively supporting the use of alternatives to animal testing.
• Use of unwanted pets or strays for animal research.
• Using animals for testing of products without a licence where a licence is required.
• No evidence that 3R Principles are being applied within a company.
• Evidence of significant or repeat non-compliance of the 3Rs (see below).
• Animal testing contracting companies with gaps in the 3R requirements and /or material adverse press.
• Fur traders and fur retailers where it is their primary product line.
• Direct involvement in fur farming (for example, foxes, seals, minks, cats and dogs).
• Direct involvement in Angora (wool and fur) production.
• Illegal wildlife trade e.g. ivory and rhino horn.
• Game reserves used for trophy killing.
• Import of hunting for trophies to the UK.
• Companies who cannot meet the standards set out by the Five Animal Freedoms.
• Companies or individuals who use animals for entertainment purposes which could cause suffering or death for the amusement and pleasure of onlookers. E.g. fighting (this excludes the use of animals in entertainment for educational or informative purposes, or where the appropriate licence has been obtained).

For more information see Animal Welfare ESE RAC (PDF 126 KB)

Prohibited

• Financing of companies involved in the manufacture, sale, trade, service or stockpiling Highly Controversial Weapons banned under International Agreements ratified by the United Kingdom (Cluster Munitions, Anti-Personnel Landmines, Biological and Toxin Weapons, Chemical Weapons and Blinding Laser Weapons) and the manufacture or sale of Bespoke Components of such weapons.
• Financing of companies involved in the manufacture, sale, trade, servicing or stockpiling of nuclear weapons in jurisdictions outside NATO countries and that are not officially involved in and accredited to the national nuclear weapons programmes of the UK, US or France.
• Financing of companies involved in the manufacture, sale or trade of defence goods where there is no (defence related) licence in place, and such is required.
• Use of child labour, forced labour, modern slavery or human trafficking.

For more information see Defence ESE RAC (PDF 107 KB)

Prohibited

• Use of harmful child labour, forced labour, modern slavery or human trafficking.
• Soft commodities producers operating in tropical regions¹ who have not obtained sustainable certification of their direct soft commodities activities and supply chain by 31st December 2024. This means obtaining the following certifications and memberships:

1. Forestry, Rubberwood, Pulp & Paper – FSC & PEFC certified
2.  Palm Oil – Roundtable on Sustainable Palm Oil (RSPO)
3. Soy – Roundtable for Responsible Soy (RTRS)
4. Beef/Leather – Global Roundtable for Sustainable Beef (GRSB) Leather Working Group (LWG)
5. Cocoa – Rainforest Alliance, Fairtrade

^{1.        Companies operating in tropical, sub-tropical and temperate rainforests.}

• Manufacture of pesticides banned under the Stockholm Convention.
• Damaging fishing methods – Use of explosives (dynamite) and/or poison (cyanide).
• Vessels that carry or use one or more driftnets with an individual or combined length of more than 2.5 kms or use of driftnets intended for the capture of species listed in Annex VIII of EU Regulation 1239/98 such as tuna and swordfish.
•  Direct involvement in shark-finning or trading in shark fin; commercial whaling; Illegal, Unreported or Unregulated (IUU) fishing activities or trade in IUU products.
• Harvesting or trade of species listed under the Convention of International Trade of Endangered Species (CITES).
• Direct involvement in illegal logging or the purchase of illegally harvested timber or companies using illegal and/or uncontrolled use of fire for land clearance.
• Tree felling or clearance within High Conservation Value Forests, UNESCO World Heritage Sites or International Union for the Conservation of Nature IUCN (I – IV) Protected Sites.
• Tree felling or tree and mangrove clearance in Ramsar Sites, Man & Biosphere Sites and High Conservation Value Areas.
• Companies with operations that have actual and potential adverse impacts on the Outstanding Universal Value of UNESCO World Heritage Sites.
• Clearing of peat lands for commercial plantations [by draining and/or burning] unless a clear and stringent peat land management procedure is in place.

The following prohibitions apply when lending to a specific project:

• Projects involving unsustainable vegetation clearance or peatland clearance/extraction. Our definition is projects involving:
• Degradation of areas (often forests) necessary to protect High Conservation Value areas.
• The conversion of primary tropical forests; or land clearance by burning.
• The conversion of High Carbon Stock tropical forests.
• Clearance of peatlands, including peat extraction.

For more information see Forestry, Fisheries & Agribusiness ESE RAC (PDF 183 KB)

Prohibited

• Use of child labour, forced labour, modern slavery or human trafficking.
• New customer relationships with corporates who explore for, extract or produce coal.
• Existing customers who are increasing coal mining activity by exploring for new coal, developing new coal mines or increasing thermal coal production.
• All project financing (including refinancing) related to coal mining activity by exploring for new coal, developing new coal mines and coal infrastructure.
• Significant producers of coal using Mountain-top Removal (MTR) mining in Appalachia (where the share of the MTR market is over 5% of total market; the company is producing more than 2 million tonnes of coal using MTR methods; the company is out of compliance with environmental and social conditions around MTR activity; or there is a net increase in production of coal using MTR mining).
• Project financing for projects involving the use of Mountain-Top Removal mining methods.
• Companies undertaking artisanal / informal mining.
• Companies involved in the extraction of asbestos.

For more information see Mining & Metals ESE RAC (PDF 129 KB)

Prohibited

• Use of child labour, forced labour, modern slavery or human trafficking (as defined by international standards, including the International Labour Organization and the UK Modern Slavery Act 2015).
• Upstream oil and gas companies where the majority (>51%) of their assets being financed are not based in the UK (onshore or offshore UK Continental shelf).
• Companies involved in onshore exploration, extraction or expansion of oil & gas in the UK using hydraulic fracturing methods (‘fracking’).
• Reserve based lending specifically for the purpose of financing oil and gas exploration, extraction and production for new customers.
• After, the 31^st December 2025 we will not renew, refinance or extend existing reserve-based lending specifically for the purpose of financing oil and gas exploration, extraction and production.
• Reserve based lending and borrowing base financing to upstream Oil and Gas companies specifically for the purpose of financing upstream assets located in Arctic or Antarctic Waters (see glossary in the 2023 ESE-Pdfs-Oil-And-Gas pdf below).
• Oil and gas majors (see glossary in the 2023 ESE-Pdfs-Oil-And-Gas pdf below), unless they have a credible transition plan aligned with the 2015 Paris Agreement in place.
• Oil and gas majors who do not report to us the overall emissions of the assets they operate by end of 2023.
• Companies involved in onshore or offshore exploration, extraction or expansion of oil and gas facilities outside the UK using hydraulic fracturing methods where the company does not have a licence to operate by the relevant authority or there are repeat compliance issues associated with operations.
• Major oil & gas companies who are not committed to the Global Gas Flaring Reduction Partnership (GGFR) and the World Bank’s “Zero Routine Flaring by 2030” initiative.
• Companies undertaking the exploration, extraction or expansion of oil from Oil Sands^.
• Companies undertaking the exploration, extraction of expansion of oil and/or gas using coal-bed Methane or Coal Liquefaction^.

^{^Existing NatWest Group exposure to these activities will only be accepted if it has been assessed as part of the company’s credible transition plan.}

• Projects involving oil exploration and production operations in Arctic or Antarctic Waters.
• Project financing of exploration and extraction of oil and gas activity in the Arctic Refuge.
• Projects involving the exploration and extraction of oil from oil sands.
• Projects involving hydraulic fracturing ('fracking') for oil and gas.
• Projects involving exploration for new oil and gas reserves.
• Projects involving the exploration or production of oil and gas in ultra deep-water.

For more information see Oil & Gas ESE RAC (PDF 159 KB)

Prohibited

• Customers who have not achieved, or not are working towards achieving the GamCare Safer Gambling Standard Advanced Level 2 by the end of 2024.
• The provision of banking services to any gambling company operating in jurisdictions where gambling is not legal.
• Online Gambling Operators who are not in scope of the United Kingdom or Republic of Ireland licensing regimes (including Alderney or Gibraltar).
• Unlicensed operators where a licence is required.
• Junket Operators.
• Evidence of serious breaches of regulations or licence conditions including financial crime and social responsibility clauses.

For more information see Gambling ESE RAC (PDF 117 KB)

Prohibited

• New customer relationships with corporates that operate unabated coal power plants.
• Existing customers who are increasing coal-fired power capacity including acquisition or construction of coal power assets or increasing the output capability of existing plants.
• All project financing (including refinancing) related to coal power activity including new coal power assets and projects that expand the life of existing unabated coal power plants and coal infrastructure.
• The activities below are prohibited in, or to, countries which are (i) subject to International Sanctions; and/or (ii) that have failed to sign the Nuclear Non-Proliferation Treaty (NPT) - Israel, Pakistan, South Sudan. (India is excluded from this category as though it has not signed the NPT it has bilateral agreements over its civil nuclear programmes and sits in the High-risk category):

1. Operators of Nuclear Power Plants (NPPs) or Uranium Enrichment Facilities;
2. Companies involved as lead contractors in the construction or design of such plants / facilities or lead contractors involved with the transport, storage and disposal of nuclear waste in countries;
3. Companies supplying uranium.

• Companies using harmful child labour.
• Companies using Forced Labour, Modern Slavery or Human Trafficking.
• Project transactions associated with construction of NPPs or Uranium Enrichment Facilities in countries (i) Subject to International Sanctions; and/or (ii) That have failed to sign the Nuclear Non-Proliferation Treaty (NPT) and adopt International Atomic Energy Agency (IAEA) safeguard agreements on the proliferation of nuclear weapons (Israel, Pakistan, South Sudan); and/or (iii) that represent a higher geo-political risk and have perceived weaker regulatory frameworks (to be determined through discussions with Country Risk should a lending opportunity be identified).
• Trade Transactions involving components destined for NPPs or Uranium Enrichment Facilities in countries that are subject to International Sanctions or restrictions relating to nuclear goods (India, Israel, Pakistan, South Sudan).

For more information see Power Generation ESE RAC (PDF 120 KB)

Prohibited

• Private Security Companies (PSC’s) where there is evidence of torture, sexual exploitation, human trafficking, slavery, forced or child labour, excessive use of physical force.
• Armed PSCs operating in high-risk countries and have not signed up to the International Code of Conduct (ICoC) or are not working to adopt within the next 12 months.
• Armed PSCs operating in low-risk countries that have not adopted ICoC or equivalent standards, policies or procedures.
• PSC’s providing armed personnel to government Armed Forces or local militia (mercenaries).

For more information see Private Security ESE RAC (PDF 118 KB)