We recently spoke to James Close, Head of Climate Change and Environment at NatWest Group in the latest on our series of interviews with a range of professionals from different banks. NatWest Group is a UK-focused banking organisation, serving over 19 million customers, with business operations stretching across retail, commercial and private banking markets. James is responsible for a small team that sets and supports the implementation of NatWest Group’s climate strategy, which is at the heart of its business strategy.


Tell us about your role and what a typical day looks like for you.

My typical day might start off with a meeting to work out what the priorities are for me and my team for the week, and particularly where we think we can add most value. This can range from working with colleagues in finance to help prepare and produce our climate-related disclosures report and climate transition plan, to working with the risk team to understand the risk parameters around climate change and how we make sure that they cascade into the business and become decision-useful for us as an organization.

We regularly work with our customer-facing business units to support development of propositions to enable customers to measure and reduce emissions. We also support relationship managers with customers who have specific needs relating to climate change and nature. Finally, we spend quite a bit of time with the board and Sustainable Banking Committee to explain our strategy and ensure good governance.


What skills do you need in your job?

Credibility on climate and deep knowledge of the economics and drivers around climate change and the environment are very important. So is an extensive network. This means we can tap into networks like the Glasgow Financial Alliance for Net Zero, Net-Zero Banking Alliance, and the UK’s Transition Plan Taskforce where we can influence and be part of leading practice around transition planning and setting goals for our climate ambitions.

The third thing, a bit of a softer skill, is around integrity, tact, and diplomacy. My team and I obviously have very high ambitions for how NatWest can drive the climate agenda, and we want to get it as embedded and integrated in what the bank does on a day-to-day basis as possible, but we also have to be appreciative of the fact that there are other business objectives and we are working in an environment where not everybody shares the same passion for climate change that we do.


What do you love about your job? What frustrates you?

I love that I’m doing something purposeful and that has a positive impact. I feel that I can inform and persuade people to do things differently so we can face up to the enormity of the climate and nature challenge.

What frustrates me is that not everybody sees the urgency of addressing the climate crisis, particularly considering the importance of policy in driving good decisions. I also think we sometimes lose sight of the big picture – what a net-zero economy looks like and the benefits it would bring in terms of greater equity, better health, reduced disease, and cleaner air.


NatWest measures, attributes, and discloses facilitated emissions arising from its capital markets activities. Why did the bank choose to do this and how has it benefitted?

We’re keen to be as transparent and as comprehensive as we can be, and we think that transparency in disclosing facilitated emissions is the best way in which we can do that. Estimating facilitated emissions is challenging and so we publish our PCAF Data Quality Scores, and we show how those improve over time.

We see facilitated emissions as one part of our wider climate-related disclosures. Basically, they enable us to explain how our bond underwriting business contributes to the wider climate agenda, while bearing in mind that facilitated emissions will vary annually sector by sector. Specifically, we disclosed the facilitated emissions associated with our green bonds underwriting to highlight our active engagement with customers, how we are supporting their shift to more climate sensitive activities, and the opportunities in the financial markets as the system inevitably changes as it shifts towards net zero.

We disclosed the facilitated emissions associated with our green bonds underwriting to highlight our active engagement with customers and how we are supporting their shift to more climate sensitive activities. Our investors appreciate the transparency we are bringing to this.

We had a session recently where we presented this to our investors. They really appreciated the transparency that we are bringing to this, and they were also really interested in how we see the opportunities emerging. Finally, they were pleased to see that we are thinking very carefully about how climate risk can be integrated into revenue opportunities – both on the balance sheet and in the capital market business.


What is your biggest recent climate related professional achievement?

I’m very proud of both climate transition plans that we’ve done. I think they’re important contributions, and I was pleased to see that recognition come through the CDP scores for the transparency of or climate disclosures and climate actions where this year we moved up from their B to their A list. We are one of only around 350 companies worldwide to achieve this. It took a lot of commitment and hard work.


What advice would you offer to banks that are trying to do something similar?

What everybody always says, and I think this is very true, is don’t make the best the enemy of the good. I think that’s particularly true of data. We spend a lot of time trying to interpret the data, but, if you get it out there, people can challenge it, improve it, and figure out how best to use it.

It is also important to try and communicate plans in clear language and make them accessible so that colleagues and clients understand what they need to do and feel that, by doing it, they can reduce emissions and get on the right track, while strengthening their business and making it more resilient.


What climate-related reading or listening that you would recommend for insight or inspiration?

I am a devotee of Outrage and Optimism with Christiana Figueres, Tom Rivett-Carnac and Paul Dickinson. Michael Liebreich’s podcast Cleaning Up is also very good. He has got some great material that helps you to think through the challenges of the transition.


What trends and innovations do you see emerging in the next 12 months?

We’re going to see more application of “systems thinking” to understand the interdependencies and interconnectedness of the transition. Producing our transition plans has helped us with our systems thinking and has enabled us to start to think slightly differently as a bank.

Changes across the system will be required to support large-scale and rapid decarbonisation. Understanding these changes from a systems perspective enables us to appreciate the challenges faced by our customers and provides insight into climate-related opportunities.

We recognise that the decarbonisation of certain sectors can have a large impact on the decarbonisation with other sectors, with energy most prominent. Opportunities within one sector may be dependent on other sectors. For example, the decarbonisation of residential and commercial real estate depends on low-carbon building materials, efficient building practices and adequate supply chains.

A systems thinking approach considers the carbon flows between sectors in the economy and factors that determine the magnitude of these carbon flows. These factors can include government policy, carbon intensity of materials, technologies and infrastructure, configurations of existing value chains and consumer preferences and behaviours.

Another example is batteries. They don’t belong to one traditional sector but, because of the exponential growth of renewables and the impact this will have on the grid, they appear across the energy system. Batteries will have a role in generation, transmission for grid balancing, distribution networks as homes produce more of their own energy and, of course, they will be associated with the decarbonisation of mobility through electric vehicles. This demand shifts them from a high-risk sector to more like a utility with huge demand and usage.


What do you wish colleagues better understood about your role?

Those of us that spend all our time thinking about climate change understand the scale of the discontinuity that’s going to arise both because of the temperature change that’s already baked in, and the pace of decarbonisation that needs to take place for us to stay us within the temperature goals of the Paris Agreement.

What I’m always keen to encourage people to think about is how different the future will be from the past and how, for us as a bank, our responsibility is to play our role in what’s going to be one of the greatest reallocations of capital of all time. If we don’t get it right as a bank, then we run the risk not only of damaging our own balance sheet, but also of not supporting businesses that really need to access capital in a timely and cost-effective way.


What inspires you to work on climate and how do you think about your contribution to this?

It is a great privilege to work on a subject that touches all of us. We have an enormous responsibility in the developed world to recognize our obligations to the developing world and that we need to both rapidly decarbonise and support developing countries to adapt and to do their own decarbonisation if we’re going to prevent the poorest, the most vulnerable, being most significantly impacted by climate change. And I think the same is true in our local communities as well. So, I’m very motivated by making sure that we do the right thing for future generations in the most equitable possible way.


The Net-Zero Banking Alliance (NZBA) is a group of leading global banks committed to financing ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050. It is the climate accelerator for UNEP FI’s Principles for Responsible Banking (PRB) and the sector-specific alliance for banks under the Glasgow Financial Alliance for Net Zero (GFANZ). Is your bank interested in joining? Find out more here.

Disclaimer: The views and opinions expressed here are those of interviewees and do not necessarily represent the views or opinions of their employer companies and affiliate companies, NZBA, PRB, or UNEP FI.