NatWest Group plans to stop doing business with a group of coal companies and end lending to some oil and gas firms because of their lack of “credible” green plans.
The number of companies affected is “relatively small … dozens and less” according to the Financial Times, which cited James Close, the bank’s head of climate change, with the change to be enforced as soon as it is practical.
Energy firms that will be able to continue borrowing from the British lender will include those “that aren’t doing any more upstream oil and gas production”, Mr Close said.
The executive added that one of the companies it plans to remove considered coal a “growth business”.
“It was pretty obvious that there was no landing space between us,” Mr Close said, adding bringing relationships such as this to an end sends a “powerful signal” to other companies that do not have new climate change plans in place.
NatWest’s oil and gas sector lending exposure fell to £3.25bn by December 2021 from £4.13bn in the same month a year before because of “tighter lending criteria now in place for this sector”, according to its climate disclosure report published last week.
Banks and other financial institutions are facing growing pressure from climate activists to stop lending to companies that show no intention of transforming their operations to be compatible with global agreements to slow rising temperatures.
Many of the world’s major banks as well as insurers and asset managers are already finding creative ways to channel private money purposefully into investment that advances net-zero goals.
NatWest first made a commitment to stop lending and underwriting for companies with more than 15 per cent of activities related to coal in 2020, unless they had credible transition plans in place by the end of last year.
The bank said it had £1.43bn of exposure to polluting companies in these categories as of December, with plans to wind down lending and underwriting to customers that account of £967 million of that figure because their transition plans did not meet the bank’s criteria.
The financial institution said it planned to “stop lending and underwriting to these customers, including stopping renewal, extension or refinancing of any existing commitments”.
It added that it will also “fully exit” relationships with coal companies, which accounted for £437m of that exposure, as soon as possible.
In November last year, it reiterated that commitment by stopping new lending to coal projects in the same week the Cop26 environment summit met in Glasgow.
Chief executive Alison Rose said the bank would not lend any new money to the sector and planned to phase out all loans to coal in Britain by 2024 and globally by the end of 2030.
“It’s an important aspect of ending that harm from activity as well as funding the transition,” Ms Rose said at Cop26.
While coal is considered one of the dirtiest ways to produce electricity to power homes and businesses, the bank said it will continue to work with oil and gas companies that are switching to a greener future.
While 190 countries managed to reach a deal late at Cop26, the final decision left Cop26 President Alok Sharma close to tears over a change in the wording of the deal.
A push led by China, and backed by India, resulted in the language being changed from accelerating the "phase out" of unabated coal to "phase down", a move that not only disappointed politicians in the UK, Europe and vulnerable countries but also businesses.
At Cop26 Ms Rose always said it would “work with customers where there is a credible transition plan aligned with Paris”.
“Our oil and gas exposure is 0.8 per cent of our balance sheet, our coal is under 0.5 per cent of our balance sheet. It is not material parts, but we recognise it’s important we take it off," she said.
NatWest returned to profit last year, posting an operating pre-tax profit of £4bn after recovering from a loss of £481m in 2020 as the wider economy rebounded.
The UK’s biggest corporate lender said mortgage demand and customer deposits were growing, with its more buoyant figures coming after it returned £1.3bn to its balance sheet from the £3.2bn it set aside in the early stage of the pandemic to cushion against bad loans.
COMPANY%20PROFILE
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Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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The years Ramadan fell in May
UAE currency: the story behind the money in your pockets
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Hili 2: Unesco World Heritage site
The site is part of the Hili archaeological park in Al Ain. Excavations there have proved the existence of the earliest known agricultural communities in modern-day UAE. Some date to the Bronze Age but Hili 2 is an Iron Age site. The Iron Age witnessed the development of the falaj, a network of channels that funnelled water from natural springs in the area. Wells allowed settlements to be established, but falaj meant they could grow and thrive. Unesco, the UN's cultural body, awarded Al Ain's sites - including Hili 2 - world heritage status in 2011. Now the most recent dig at the site has revealed even more about the skilled people that lived and worked there.
Correspondents
By Tim Murphy
(Grove Press)
Global state-owned investor ranking by size
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United States
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Review: Tomb Raider
Dir: Roar Uthaug
Starring: Alicia Vikander, Dominic West, Daniel Wu, Walter Goggins
two stars
More from Neighbourhood Watch:
Killing of Qassem Suleimani
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
T20 World Cup Qualifier
October 18 – November 2
Opening fixtures
Friday, October 18
ICC Academy: 10am, Scotland v Singapore, 2.10pm, Netherlands v Kenya
Zayed Cricket Stadium: 2.10pm, Hong Kong v Ireland, 7.30pm, Oman v UAE
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Ashfaq Ahmed, Rameez Shahzad, Darius D’Silva, Mohammed Usman, Mohammed Boota, Zawar Farid, Ghulam Shabber, Junaid Siddique, Sultan Ahmed, Imran Haider, Waheed Ahmed, Chirag Suri, Zahoor Khan
Players out: Mohammed Naveed, Shaiman Anwar, Qadeer Ahmed
Players in: Junaid Siddique, Darius D’Silva, Waheed Ahmed
Company%20profile
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THE%20HOLDOVERS
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
ANATOMY%20OF%20A%20FALL
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EJustine%20Triet%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ESandra%20Huller%2C%20Swann%20Arlaud%2C%20Milo%20Machado-Graner%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%205%2F5%3C%2Fp%3E%0A
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Brief scoreline
Switzerland 0
England 0
Result: England win 6-5 on penalties
Man of the Match: Trent Alexander-Arnold (England)
Without Remorse
Directed by: Stefano Sollima
Starring: Michael B Jordan
4/5
Dengue%20fever%20symptoms
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'Panga'
Directed by Ashwiny Iyer Tiwari
Starring Kangana Ranaut, Richa Chadha, Jassie Gill, Yagya Bhasin, Neena Gupta
Rating: 3.5/5
SPEC%20SHEET%3A%20APPLE%20IPAD%20(2022)
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UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
MATCH INFO
Asian Champions League, last 16, first leg:
Al Jazira 3 Persepolis 2
Second leg:
Monday, Azizi Stadium, Tehran. Kick off 7pm
