The British bank Natwest (NWG.L.) has cut its lending to clients in oil and gas by 21% in 2021. It plans to reduce it further in efforts to decarbonise the loan book and achieve net-zero emission, it stated on Friday.
Global warming is being addressed by financial firms worldwide. However, many have not yet put in place firm plans, especially for the short term.
These figures were revealed in the first update of Natwest, which warned in 2020 that it would cut off funding for larger oil companies if they did not have a credible plan for transitioning to net zero.
Natwest reported that its oil and gas lending fell by a fifth to 3.25 Billion Pounds ($4.43 Billion) last year. Total lending to this sector now accounts for 0.7% of its total loan books.
Chief Executive Alison Rose stated in a statement that finance is a key enabler for Net-Zero. She said that she was taking action to help end the most harmful activities, champion climate solutions, and accelerate the transition to a zero-carbon economy.
According to the bank, it is further restricting lending and will now only lend to upstream oil & gas companies whose majority of their financed assets are located in the UK and where they report emissions by the end of 2023.
An analysis of large oil and natural gas companies, and those that have more than 15% of their activities with thermal or lignite coal, including power generation, mining and trading, revealed that many of them did not have a sufficient climate transition plan.
Accordingly, the bank announced that it would cease lending and underwriting to 967 million pounds worth of total.
The lender’s full-year results showed an increase in pretax profit to 4 Billion Pounds.
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