NatWest Tops Ranking of Banks Backing Green Energy, BNEF Says

Article content

(Bloomberg) — NatWest Group Plc provided more than five times as much finance to low-carbon energy projects as to fossil-fuel businesses in 2021, the best ratio of all major lenders studied, according to an analysis by BloombergNEF.

Article content

The British firm lent $10 billion to green projects and $1.8 billion to fossil fuels, giving it an energy supply banking ratio of 5.5 in the BNEF league table. That was more than double the proportion at Deutsche Bank AG, which ranked second, according to BNEF’s Financing the Transition report, published Tuesday.

Article content

Most climate scenarios indicate that the ratio of low-carbon to fossil-fuel investment should reach at least 4-to-1 by 2030. 

While NatWest and a handful of smaller lenders have already achieved that goal, most are far behind. In aggregate, banks underwrote $1.9 trillion of energy supply transaction activity in 2021. About $1 trillion of that went toward fossil fuels, resulting in a ratio of 0.81, according to the report. 

Article content

The BNEF ranking isolates banks that financed and facilitated at least $10 billion of energy supply projects in 2021. Widening the remit to include smaller lenders would see NatWest ranking 15th after firms including Danske Bank A/S and Swedbank AB, as well as a number of green banks that didn’t provide any financing at all to fossil-fuel projects in 2021.

A spokesperson for NatWest noted the lender is targeting £100 billion ($120 billion) in climate and sustainability funding and financing by the end of 2025, and its oil and gas exposure was 0.7% of its balance sheet lat year.

—With assistance from Tim Quinson.