In the most recent instance, the bank has been named by officials in a state in the United States that has a statute to safeguard the oil and gas business.
Government officials in Texas have added NatWest Group to the increasing list of financial organisations that are being regarded as participating in a “boycott” of energy corporations. This move has the potential to restrict the amount of business that the United Kingdom bank does with the oil-rich state of Texas.
Glenn Hegar, the Texas Comptroller, has been listing corporations that restrict their business relationships with climate-harming fossil fuel firms. The most recent company Hegar has targeted is the high-street banking group. Hegar has been following up on companies that have been named.
By the year 2026, the company “will not renew, refinance, or extend existing reserve-based lending used specifically for the purpose of financing oil and gas exploration, extraction, and production.”
According to the website of the lending institution, the sustainability strategy was a component of the lender’s attempts to “end the most harmful activity” that was contributing to the climate problem.
As a result of this attitude, NatWest is now included on the list of corporations that are subject to the Texas comptroller’s divestment act. Other companies on this list include BlackRock, HSBC, UBS, and Société Générale.
A law that was passed in 2021 with the intention of safeguarding the oil and gas industry in the state is responsible for the compilation of the list, which is labelled “financial companies that boycott energy companies.” According to the law, Texas agencies are required to either conclude their business relationships with corporations that are withdrawing from the oil and gas industry or provide an explanation as to why they continue to do business with those companies.
According to what is known, NatWest has a minimal presence in the state of Texas. A statement from the banking group, which was originally known as Royal Bank of Scotland, was not forthcoming.
Hegar’s decision is a component of a larger crackdown by the oil-friendly state on the environmental, social, and governance (ESG) policies of businesses. This crackdown has also put pressure on financial companies to withdraw from international efforts that encourage signatories to cut their greenhouse gas emissions.
Hegar expressed his satisfaction with the news that JP Morgan and State Street Global Advisors had withdrawn from the Climate Action 100+ initiative in February. He also criticised the environmental, social, and governance (ESG) movement for fostering an environment that prioritised politics above profits and caused many financial institutions to disregard their fiduciary duties to their clients.
There is a change occurring in countries in mainland Europe and the United Kingdom that is gradually pressing for more climate-friendly policies from financial institutions. This is happening as governments race to limit global warming to 2 degrees above preindustrial levels. The policies that are being implemented in Texas are in direct opposition to this shift.