NatWest Group has pledged to mobilise £200 billion ($268 billion) in climate and low-carbon transition-related funding and financing between July 2025 and the end of 2030, doubling its previous sustainable finance target. The British banking and insurance group had already surpassed its earlier goal of facilitating £100 billion ($134 billion) ahead of schedule, delivering £110 billion ($148 billion) by June 2025.
The commitment marks a strategic shift for NatWest, which has introduced a new Climate and Transition Finance (CTF) Framework to guide its future investments. The updated framework refines the definition of climate and transition finance, introducing tailored inclusion and exclusion criteria for each sector and moving away from a one-size-fits-all approach.
Under the new framework, projects such as electric arc furnaces or steelmaking using recycled scrap qualify as climate finance, while activities like blue hydrogen production—derived from natural gas with carbon capture—fall under transition finance. The bank has drawn a firm line against unabated fossil fuels and grey hydrogen, which are excluded from its CTF classification.
The CTF framework is aligned with respected benchmarks, including the UK Climate Change Committee’s “Balanced Pathway” to net zero by 2050 and the International Energy Agency’s global net-zero roadmap. Transition finance is defined as funding that directly or indirectly reduces greenhouse gas emissions and supports clients’ journeys to net zero, without locking in carbon-intensive assets beyond 2050.
NatWest’s approach distinguishes between “pure players”—businesses whose core activities centre on climate mitigation—for climate finance, and broader “entity-level” assessments for transition finance, which consider the overall operations and asset mix of a company.
The scope of eligible activities spans mortgages, corporate loans, project financing, securitisation, and underwriting for both debt and equity. However, for general financing to qualify as climate-aligned, at least 90% of the recipient’s revenues or assets must come from activities defined as climate finance.
The announcement comes amid the UK Government’s controversial decision to abandon plans for a green finance taxonomy, which had drawn criticism from transition finance experts. In response, NatWest has developed its own definitions and eligibility criteria to ensure clarity and integrity.
“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,” the bank stated.
