NatWest Group revealed the appointment of Lord Nicholas Stern as its independent climate change advisor in its latest announcement. As per a statement from the firm, Lord Stern takes on the role effective immediately and will provide independent advice, guidance, and challenge to the bank’s senior executives and management for eight days a year for an initial term of two years.
His advice will focus on helping the firm implement and deliver its ambitious targets for banking operations as well as for its future strategic direction pertaining to the environment and climate change. Nicholas is currently serving as the Chairman for the Centre for Climate Change Economics & Policy (CCCEP) and for the London School of Economics’ Grantham Research Institute. The Group also confirmed in its statement that it has signed up for the United Nations Environment Programme Finance Initiative’s Collective Commitment to Climate Action (CCCA).
The CCCA defines how banks align their services and lending with the objectives of the Paris Agreement. It should be noted that NatWest Group has become the biggest lender to the UK’s renewable energy industry. Earlier this year, in February, the bank put tackling climate change to center point focus of its purposeful strategy and announced a number of specific targets to achieve said goals. Some of these targets are
- Reducing its own operations to Net Carbon Zero by end of 2020 & becoming climate positive by 2025 by driving the material reduction in the climate impact of its financing activity. In particular, it wishes to at least reduce half its climate impact from financing activity by 2030 and take actions that are necessary to align its actions with the 2015 Paris Agreement.
- According to Paris Agreement, banks must stop lending and underwriting to companies with more than 15% of activities related to coal, unless said institutions have credible transition solutions that allow it to align with the Paris agreement by end of 2021.
- Further, the bank plans to fully phase-out of coal by 2030 stopping its lending and underwriting services to all major oil and gas producers without a credible transition plan that meets the above-mentioned criteria.
Speaking about bank’s commitment to its climate change plans and Lord Stern’s addition to the team, Alison Rose – CEO of NatWest Group said “At NatWest Group, we are determined to lead on the collaboration and cooperation that is so critical to tackling the causes of climate change and transitioning to a low carbon economy. This is the biggest challenge facing our planet today, and I am delighted that Lord Stern has agreed to work with us to provide independent advice and guidance to help us meet our ambitious targets and drive positive change on this crucial issue”.
Speaking about his new role at the firm, Lord Stern said “There is an intense urgency to tackle climate change now: this is an absolutely crucial decade for taking action to protect future generations. The coronavirus pandemic has highlighted the dangers, fragility, and inequities of the old economy. The necessary investments can drive both a strong recovery in output and employment and a new and attractive model of low-carbon development which will be the growth story of the 21st century. We now have an opportunity to build back better. It is crucially important for financial institutions to rise to the climate emergency and I will provide independent advice and guidance to NatWest Group to help it meet its climate ambitions”.
