Shareholder group calls for vote against NatWest chair as bank waters down fossil fuel lending restrictions

British lender NatWest has come under pressure from an investor group after announcing it was easing restrictions on lending to new fossil fuel projects.

The bank, which five years ago acted as a sponsor of the UN COP26 climate summit in Glasgow, unveiled major changes to its financing rules for new oil and gas projects. Climate campaigners accused it of “tearing up” its fossil fuel lending restrictions.

The new rules, announced alongside the release of its Annual Report on Friday, allow the bank to provide new loans to oil and gas companies, provided those firms have transition strategies in place and have committed to the Global Gas Flaring Reduction Partnership (GGFR) and the World Bank’s “Zero Routine Flaring by 2030” initiative.

“Acknowledging that oil and gas will continue to play an important yet declining role in energy supply in the medium term, we will continue to engage with and support this sector, rather than disengage prematurely,” the report said.

However, climate campaigners warned that the new rules are not stringent enough.

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“NatWest has long positioned itself as a climate leader, so stepping back from commitments to restrict financing for the largest fossil fuel firms expanding oil and gas extraction is a serious concern. It has also worryingly opened the door to supporting more fracking, despite the dangers this can pose to local communities and the environment,” said Kelly Shields, senior campaign manager at ShareAction.

The group is now urging shareholders to vote against the chair of the board at the bank’s upcoming AGM on 28 April.

When approached for comment, a NatWest spokesperson said: “Following a review of our climate ambitions, targets, and wider environmental and social policies, we are retaining our interim 2030 ambition to at least halve the climate impact of our financing activity against a 2019 baseline, as we work towards our long-term 2050 net-zero ambition.

“We’ve also refined our approach to ensure it reflects the evolving policy environment, the complex and diverse needs of the transition, and where we can deliver the greatest impact for customers.”

Banks play a key role in funding the fossil fuel industry, both by providing loans and underwriting bond issuances, with around 90% of fossil fuel projects financed through debt. However, NatWest is also a major lender to the energy transition. Alongside its updated lending rules, it announced plans to provide £200bn in climate and transition finance by the end of the decade.

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