According to its Springboard to Sustainable Recovery report, part of the funding will be used to transition from fossil fuel energy generation to renewables, which can include funding energy storage plants and improving the energy efficiency of homes.
The lender has also confirmed that it will bring out green loan and asset finance solutions, as well as a climate and sustainable funding and finance awareness building series targeted at SMEs.
Natwest will launch six “accelerators” around the UK focusing on clean transport, the circular economy and transition to net zero.
It will also bring out new tools to help businesses monitor their carbon footprint and there will be mandatory climate training for all relationship managers.
The funding follows on from its target to provide £20bn of climate and sustainable funding between 2020 and 2022, which it completed earlier this year.
It is understood that the funding will come from Natwest’s balance sheet and potential recipients need to meet criteria around built environment, energy efficiency, environmental impacts, information technology, low carbon and offsetting technology, renewable energy, sustainable transport, water and waste management.
Key role of SMEs
The report said that SMEs would play a key role in helping the UK meet its climate targets as it contributed between 30 and 35 per cent of the UK’s total emissions.
However, less than 10 per cent of SMEs views climate action as a source of future growth.
The report said that SMEs, which number around six million in the UK, could meet half of the UK’s abatement targets by reducing greenhouse gases or removing them from the atmosphere.
It added that tackling climate change could represent a £160bn opportunity for SMEs, and the transition to net zero could create 130,000 new jobs and 30,000 new companies.
Natwest’s chief executive Alison Rose (pictured) said: “We are with them on every step of the journey that takes them from awareness and understanding, to ability to act, and finally to achieving positive climate and financial impact.
“I’m firmly of the view that we should never underestimate the power of the small – and in this instance SMEs – for leveraging big advances. What this report tells us, in clear numbers, is that all sectors of the economy will need to play their part in helping the UK achieve its climate ambitions. We must look at this not just as an imperative, but as an opportunity for businesses.”
SME recommendations
The bank made six recommendations to help SMES achieve effective transition, which included better funding access, improving awareness and better knowledge on measuring and reporting climate impact.
Other recommendations included: developing new skills and capabilities, improved financial certainty of climate action benefits and better navigation support to assess what is available.
Natwest said SMEs had two opportunities to create value from acting on climate change: one by reducing their own emissions and the other by taking wider climate action.
The report added that currently there were barriers to SMEs reducing their own emissions, which included lack of knowledge, relevant skills and capabilities and funding.
However, it said that reducing emissions would help SMEs lower their costs and access new markets. They would consequently be able to demand a price premium ahead of their competitors.
SMEs should also deploy and install green technology, whether that is solar thermal collectors, installing electric vehicle charge points, updating heat pumps and insulation, bringing in renewable energy power generation equipment or creating products that can capture methane from landfills.
