A part of the amount will also help in supporting the bank’s customers, including SMEs, in their transition to a net zero and a more sustainable economy
A branch of NatWest in Birkenhead, England. (Credit: Phil Nash from Wikimedia Commons CC BY-SA 4.0 & GFDL)
NatWest has committed to offering £100bn of climate and sustainable funding and financing (CSFF) by the end of 2025 for supporting the investment required to transition the UK to a net zero economy.
The British banking group said that the pledged amount will also help in supporting its customers, including small and medium enterprises (SMEs), in their shift to a net zero and a more sustainable economy.
A report by NatWest dubbed as ‘Springboard to Sustainable Recovery’ outlines the potential opportunity for the UK economy from the net zero transition, with SMEs found to have the scope to generate up to 130,000 new jobs. Nearly 30,000 new businesses can be produced, thereby opening up an estimated £160 billion opportunity for the British economy, said the banking group.
NatWest’s report as well as its related initiatives are aimed at helping efforts to reduce its financed emissions by 50% by the end of this decade and in achieving the net zero targets by 2050.
As per the report, less than 10% of SMEs are seeing climate action as a source of future growth.
However, the report found that SMEs have two distinct opportunities to gain value by implementing climate action. They can drive the value of their business through reducing their emissions and accelerating growth through broader climate actions.
NatWest said that if the SMEs are supported, then most of them can benefit financially by the reduction of their carbon footprint as well as by supporting the UK’s transition to net zero.
The report urges the financial institutions, government, large corporates, and industry bodies to take part in supporting SMEs to exploit the climate opportunity.
NatWest is also planning to introduce a green loan product designed for SME customers, as well as new specialist accelerators for clean transport and circular economy. Besides, it will launch new tools for companies to assess their carbon footprint.
The report’s six recommendations where SMEs require the most support include funding access, awareness, knowledge, skills and capabilities, market access, and navigation.
NatWest Group chief executive Alison Rose said: “According to the Springboard to Sustainable Recovery report published today, SMEs play a critical role in the UK economy, contributing around 50% of total UK turnover and around 60% of employment.
“We have identified the potential opportunities as being worth £160bn for SMEs and the UK economy, and we want to do everything possible to support our customers in achieving a share of that prize.
“This report is the response to what our business customers are telling us they need in terms of practical support as they face a complex decision-making process.”