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Rose links NatWest bonuses to bank’s green targets

RBS and Alison Rose

Alison Rose: ‘we need to show customers what we are doing’

NatWest (RBS) boss Alison Rose has told her executive team that bonuses will in future depend on the bank hitting its environmental targets.

In one of the first responses to the Chancellor’s new demand that Britain’s biggest firms set out their green transition plans, Ms Rose said she had made “climate transition and our targets a key part of our executive remuneration.”

The bank’s CEO said this would enable the bank to “:show our customers and our shareholders what we are doing and how we are doing it”.

The message also represents a major transition for the bank which was at centre of the global financial crash more than a decade ago in which bankers were accused of operating a self-rewarding culture.

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Ms Rose’s commitment follows similar pledges by Lloyds Bank and ITV and it will turn the focus on other big City companies on how they fit the green agenda into their overall strategies.

Last month, former Bank of England government Mark Carney said banks should link executive pay to climate risk management as part of efforts to align the finance industry with Paris climate goals.

Speaking at the UN Environment Programme Finance Initiative roundtable he said lenders should – at the very least – be transparent over whether or not pay is being tied to climate targets.

Today, Chancellor Rishi Sunak told finance sector leaders attending the COP26 climate change summit in Glasgow, that companies listed in the UK will be forced to publish their green transition plans.

He is seeking transparency amid concerns that big firms are guilty of so-called “greenwashing” where firms can make claims about their environmental practices but fail to live up to them.

Those who fail to make enough progress, or whose plans are deemed too weak, could face sanctions including fines or even removal from the stock exchange, he said.

Mr Sunak noted that 450 firms controlling 40% of global financial assets, worth some $130 trillion (£95 trillion), have now aligned themselves to the key goal of limiting global warming to 1.5C above pre-industrial levels.

“This is a historic wall of capital for the net-zero transition around the world,” he said. “What matters now is action, to invest that capital in our low carbon future.

“To do that, investors need to have as much clarity and confidence in the climate impact of their investments as they do in the traditional financial metrics of profit and loss.”

To achieve this, the Chancellor claimed that the entire global financial system would be “rewired” towards net zero.

The new rules will be drawn up by a task force drawn from universities, civil society groups, industry and regulators.

However, Mr Sunak’s plans have already stirred some resistance from those who feel firms could still find ways to sidestep their obligations, such as moving their head offices overseas or leaving the stock exchange. 

If the plans are too draconian there are fears they could harm the City of London’s standing as an investment capital.



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