Climate change is one of the biggest challenges faced by the world today and we want to better understand the impact of our business on the climate and help our customers meet their environmental responsibilities.

Industry partnerships

We are active members of various UK Finance initiatives on climate changes and during 2022 we joined Bankers for Net Zero (B4NZ), an initiative that brings together banks, businesses and regulators to accelerate the UK’s transition to net zero.

Financed emissions

To plot a clear path to net zero, we need to understand the emissions we enable through our lending – these are known as our financed emissions. The largest contributor to our financed emissions is our buy-to-let mortgage portfolio where decarbonisation through household energy efficiency measures will play a vital role in the UK’s 2050 net zero ambition. We calculate our buy-to-let financed emissions using the Partnership for Carbon Accounting Financial methodology which estimates CO2 emissions using Energy Performance Certificate data.

Physical risks

Climate change and other environmental factors which may, of themselves, increase financial risks. For example, increased flooding risk, which might have an adverse impact on security asset valuations.

Transitional risks

Regulatory or government pressure on lenders, or other businesses, to reduce the environmental impacts of their product chains, impacting the ability to realise security on an asset or continue business lines.