NatWest

NatWest has lent £3 billion to North Sea firms since Paris Agreement

The Scottish bank, NatWest, issued loans worth nearly £3bn to the biggest firms operating in the North Sea oil industry in the five years after the Paris Agreement was signed in 2015. 

An analysis seen by The Ferret found that the Edinburgh bank —  known as the Royal Bank of Scotland until 2020 —  lent £2.95bn to oil companies who operate in UK waters between 2016 and 2021.

Campaigners who want banks to divest from fossil fuels said NatWest was on “morally and financially shaky ground” with its support for the oil and gas industry. They argued that oil and gas companies were the only people to benefit from the loans “whilst millions of people can’t afford to heat their homes and our climate is destroyed”. 

NatWest said it is committed to ending its “most harmful” lending and is one of the “biggest backers of the UK’s renewables sector”. It added that loans to the oil and gas sector had “significantly reduced” and now accounted for just 0.7 per cent of all lending. 

The figures come from an analysis of investments in the biggest North Sea firms conducted by campaign group Uplift, and a Dutch non-profit research firm called Profundo

In total, the analysis found that Scottish investors provided over £6bn of financing to the oil and gas companies between 2016 and 2021. While NatWest only provided loans to the companies, other Scots firms bought bonds and shares. 

Standard Life Aberdeen (Abrdn) and Baillie Gifford were the industries’ second and third biggest Scottish funders, respectively.

Abrdn bought shares and bonds worth over £2bn in the five-year period. Meanwhile, Baillie Gifford had investments worth in excess of £1bn globally.

Among the companies receiving loans from NatWest were Shell, BP and Total, who are among the world’s biggest climate polluters. In 2021 alone, Natwest —  which is majority state-owned — lent £776m to North Sea oil companies.

A May 2021 publication by the International Energy Agency (IEA) stated that no new fossil fuel projects could go ahead if the world was to limit warming to no more than 1.5 degrees. This was the ambition set by world leaders when they signed the Paris Agreement at the end of 2015. 

Despite this, there is still a pipeline of 29 major oil and gas projects planned off the UK coast which will have a massive environmental impact, say critics. These new developments could combine to produce nearly a billion tonnes of carbon dioxide emissions, which cause global heating. 

The UK’s fossil fuel energy system only benefits oil and gas companies and their financial backers whilst millions of people can’t afford to heat their homes and our climate is destroyed. 

Ric Lander, Friends of the Earth Scotland

NatWest is signed up to the Science Based Targets initiative which is designed to help companies reduce their contribution to climate emissions in line with the aims of the Paris Agreement.  

The bank was also a main sponsor of last year’s COP26 climate summit, although its involvement with the conference was criticised due to its history of financing fossil fuels.  

Campaigners at the conference interrupted a meeting of the main sponsors of COP26 — hosted by NatWest — citing a report by The Ferret which found that the ‘principal partners’ of the event had caused more climate pollution worldwide than the whole of the UK. 

Beau O’Sullivan, who works for the campaign group, Bank on Our Future, said that the Scottish investors are “the engine that keeps pumping out oil and gas from the North Sea”

O’Sullivan said: “NatWest is on morally and financially shaky ground with its level of support for fossil fuel expansion.

“How can it condone this? All banks must make a rapid and climate-proof plan to withdraw financing for all companies still expanding their fossil fuel operations. Nothing less will do.”

Europe’s dependence on Russian gas supplies has come into focus in the wake of Vladimir Putin’s invasion of Ukraine. Some commentators have argued that the continent’s reliance on Russian fossil fuels has hampered its ability to impose economic sanctions on Moscow which might help end the war. 

Although the UK only imports around four per cent of its gas from Russia, the country is still vulnerable to soaring prices caused by external shocks like the situation in Ukraine –  because gas is a globally-traded commodity.

The trade body for the UK oil and gas industry, Offshore Energies UK, has argued that increased production of gas in the North Sea could help alleviate this issue and keep prices down. 

However, environmental groups have pointed out that it would take a long time for production to start at any new gas reserves, and this would distract from the need to move away from natural gas. They believe that a rapid scaling up of the country’s renewable resources is the best way to insure the UK’s energy security. 

Baillie Gifford’s investments have come under scrutiny this week after The Ferret revealed that it was investing MSPs pensions in a Russian bank which is now subject to UK sanctions as a result of the invasion.

Baillie Gifford — which manages the Scottish Parliamentary Pension Scheme — had holdings worth £299,571 in Sberbank, which is owned by the Russian state. 

Friends of the Earth Scotland’s divestment campaigner, Ric Lander, said that bosses at NatWest were “putting their profits above all else and critically undermining efforts to transition to safe renewable energy.”

Lander said: “The UK’s fossil fuel energy system only benefits oil and gas companies and their financial backers whilst millions of people can’t afford to heat their homes and our climate is destroyed. 

“Oil and gas production must be phased out in a managed way over the next decade, with investments redirected to scaling up renewables and ensuring a just transition so that every worker can retrain and move into a decent green job.

Lander called on NatWest and the other Scottish investors to join the “over 1,500 investors worth $40 trillion” who have divested from fossil fuels. He added that Scots need to “demand” that pension funds, banks and local governments “use our money to back a better future”.

A NatWest Group spokesperson said: “NatWest Group is committed to helping end the most harmful activity and is one of the biggest backers of the UK’s renewables sector. Our lending to the oil and gas sector has significantly reduced over the years, now accounting for 0.7% of all lending. 

“In line with our strategy, we have completed analysis on oil and gas majors who we bank and will only retain business with those who have a credible transition plan in line with the Paris agreement.

“We have recently tightened our oil and gas lending policies further to only continue to support upstream oil and gas companies where the majority of their assets being financed are based in the UK, either onshore or offshore UK Continental shelf. 

“Our focus is on supporting our customers to transition away from fossil fuels, such as through our pledge to provide £100bn climate and sustainability funding and financing by 2025.”

Abrdn and Baillie Gifford have been contacted for comment. Both companies say that they are committed to reducing their investments in fossil fuels.

Abrdn’s sustainability policy says it considers climate change-related risks and the ability to “transition to alternatives” to fossil fuels in its investment decisions.


A recent Baillie Gifford publication noted its environmental policy is to “identify and invest in companies for which the energy transition is a tailwind for growth, or those demonstrating leadership in climate-related mitigation.

Photo Credit: iStock/Alexey Rezvykh

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