Texas officials have added NatWest Group to a growing list of financial firms considered to be taking part in a “boycott” of energy companies, in a move that could limit the UK bank’s business with the oil-rich US state.
The high street banking group is the latest company to be targeted by the Texas comptroller, Glenn Hegar, who has been naming companies that restrict their business dealings with climate-harming fossil fuel firms.
NatWest has said that, by 2026, it “will not renew, refinance or extend existing reserve-based lending used specifically for the purpose of financing oil and gas exploration, extraction and production”.
The lender’s website said that the sustainability policy was part of its efforts to “end the most harmful activity” fuelling the climate crisis.
The stance puts NatWest among a growing list of financial services companies on the Texas comptroller’s divestment statute list, including BlackRock, HSBC, UBS, and Société Générale.
The list – entitled “financial companies that boycott energy companies” – is the result of a 2021 law designed to protect the state’s oil and gas sector. The law states that Texas agencies must either stop doing businesses with companies divesting from the oil and gas industry, or explain why they are continuing to deal with those firms.
NatWest is understood to have limited exposure to Texas. The banking group, formerly named Royal Bank of Scotland, declined to comment.
Hegar’s decision is part of a wider crackdown on companies’ environmental, social and governance (ESG) policies by the oil-friendly state, which has also put pressure on financial companies to pull out of international initiatives that push signatories to reduce their greenhouse gas emissions.
In February, Hegar welcomed news that JP Morgan and State Street Global Advisors had pulled out of Climate Action 100+, and chastised the ESG movement for creating an “environment that put politics above profits and led many financial firms to disregard their fiduciary duty to clients”.
The Texas policies are contrary to the shift taking place in countries in mainland Europe and the UK, which are increasingly pushing for more climate-friendly policies from financial institutions, as governments race to limit global heating to 2 degrees above preindustrial levels.
