Name: NatWest at Sibos 2023 – Building standards into green finance
Uploaded: 2023-10-03T15:00:19.667Z
Duration: 649.43
Description: At the Sibos 2023 conference in Toronto, FinTech Futures sat down with Caroline Haas, Head of Climate and ESG Capital Markets at NatWest, to discuss the importance of net-zero strategies for financial services firms and how clear climate-focused initiatives and reporting processes can help retain and attract fixed income ESG investors.

12-Caroline Haas.mp4

12-Caroline Haas_1.vtt

ENGLISH

{{00:00:06}}
This is Fintech Futures at
Sibos, Caroline Haas of NatWest.

{{00:00:09}}
Caroline, thank you so much for
taking the time out to speak with us.

{{00:00:12}}
Just to get started, I'd like
to give a quick introduction to

{{00:00:13}}
yourself and your role at NatWest.

{{00:00:15}}
Thank you.

{{00:00:16}}
Thank you very much for asking
me to come to this afternoon.

{{00:00:19}}
I head up the climate and the ESG.

{{00:00:20}}
SD capital markets team within
NatWest where we really do cover

{{00:00:24}}
all ranges of customers from the
corporates, the financial institutions

{{00:00:28}}
out to private equity and really
service them on what they need

{{00:00:33}}
for their sustainability journeys.

{{00:00:36}}
Excellent.

{{00:00:36}}
And you're here speaking on a panel about
building standards into green finance.

{{00:00:40}}
For those not in attendance, would
you be able to give us a quick rundown

{{00:00:42}}
of what was covered there and some of
the key takeaways that came out of it?

{{00:00:45}}
Absolutely.

{{00:00:46}}
It's interesting for years
we've all wanted standards

{{00:00:50}}
and we really do need them.

{{00:00:51}}
And now, ironically, there's this
little bit of a pushback saying,

{{00:00:55}}
are actually now standards too much?

{{00:00:57}}
We need a combination of and this space
is so new that actually You need guidance,

{{00:01:03}}
you need standards, you also need them to
be regulatory versus just voluntary, and

{{00:01:07}}
then you almost need to do a review and a
slight reform of what was initially done.

{{00:01:12}}
We've just seen that actually on the
SFR SFDR regarding Article 8 and 9.

{{00:01:19}}
So I think I really welcomed in COP26
when the ISSB was initially announced,

{{00:01:25}}
and it was fantastic to see even after 18
months them to release the standards or

{{00:01:30}}
the suggested metrics, KPIs around S1 and
S2, one being more sustainability and the

{{00:01:37}}
other one much more focused on climate.

{{00:01:39}}
Now, obviously, we need to bear
in mind that there are going to

{{00:01:42}}
have to be differences if that
is between large corporates and

{{00:01:46}}
small and medium sized enterprises.

{{00:01:49}}
Similarly, that there's going to have
to be adjustment between the developed

{{00:01:52}}
world versus the developing world.

{{00:01:56}}
and the respective metrics that are
going to be required accepting that

{{00:02:00}}
there are different materiality
or maturities along those.

{{00:02:05}}
Excellent, And NatWest has just
recently published its Global

{{00:02:07}}
Fixed Income Investor Survey.

{{00:02:09}}
Can you tell us some of the
top level findings from that?

{{00:02:11}}
So I think it's always funny,
People maybe I'll take a step back.

{{00:02:15}}
The survey went out to 225 asset managers.

{{00:02:19}}
It was actually very equally
split between a third, being

{{00:02:24}}
Europe, APAC, and North America.

{{00:02:27}}
And what was very welcoming to
see is that 71 percent of the

{{00:02:31}}
respondents actually said that
they had made net zero commitments.

{{00:02:35}}
What was also interesting was to
hear that 39 percent of them felt

{{00:02:38}}
that they were ahead of budget.

{{00:02:41}}
I would say there is definitely a tendency
that one will point to Europe being

{{00:02:44}}
further ahead followed by the US and
then a slight lag coming through APAC.

{{00:02:50}}
I think that was definitely
reconfirmed, at the same time it was

{{00:02:54}}
interesting to see how quickly the U.

{{00:02:56}}
S.

{{00:02:57}}
asset managers actually have come
on stream over the last 18 months.

{{00:03:01}}
The other key takeaway I would say is
how much they're using the raw data.

{{00:03:06}}
Often it is assumed that the ESG ratings
are feeding into those investment

{{00:03:11}}
decisions, when actually it's the ESG
scorecards that each asset manager creates

{{00:03:16}}
for themselves, and they use the data
that flows in through the data providers.

{{00:03:22}}
So I think it was a lot of reaffirmation
for us what again was slightly called out

{{00:03:29}}
is that although regulation is helpful, it
is also at this point slightly confusing.

{{00:03:35}}
Excellent What would you say would
be the most important thing then

{{00:03:38}}
to fixed income ESG investors?

{{00:03:41}}
So staying on the decarbonization and
climate theme, I think what's interesting

{{00:03:45}}
is how often we now hear, what are
the transition plans of the entity

{{00:03:49}}
that they would like to invest in?

{{00:03:51}}
Now, obviously a green narrative
is lovely, but actually we really

{{00:03:54}}
need to transition the real economy.

{{00:03:57}}
That is not just one number.

{{00:03:59}}
People like to focus on a scope
1, 2, or now, in the future, or 3.

{{00:04:03}}
But it's actually, how
are they going to do that?

{{00:04:05}}
And how is that going to
affect their supply chains?

{{00:04:08}}
How are they going to actually
communicate that and hold their management

{{00:04:12}}
accountable to that actually happening?

{{00:04:15}}
The other piece is, I think, how
that now relates into the products.

{{00:04:19}}
And the products of...

{{00:04:20}}
It's transparency that is the
key point that they call out.

{{00:04:25}}
SLBs are obviously a newer product
versus the use of proceeds bonds.

{{00:04:30}}
And how do you make those robust
material and really something

{{00:04:34}}
that people feel are credible.

{{00:04:37}}
And the final thing I would call out
is clear disclosure and reporting

{{00:04:42}}
and obviously the standards
that I talked about on ISSB will

{{00:04:46}}
help because it will get guides.

{{00:04:48}}
Right now it is very qualitative and
obviously very verbal in a way versus

{{00:04:54}}
it being actually distinct numbers.

{{00:04:56}}
And once that happens, you can benchmark
more easily and decide who are the

{{00:05:00}}
outperformers or the underperformers.

{{00:05:03}}
So when you take all of that together,
I think the asset managers some of the

{{00:05:08}}
sort of institutional investors, pension
funds, insurance companies, what they're

{{00:05:11}}
really trying to use engagement is to find
out those pieces of information that will

{{00:05:18}}
help them for their investment decision.

{{00:05:21}}
So what are some of the impacts
of decarbonisation frameworks

{{00:05:24}}
on fund managers and how is this
aligned to reporting standards

{{00:05:27}}
used by corporates globally?

{{00:05:31}}
As much as regulation is going to drive
this, it is going to ultimately be

{{00:05:35}}
the investing community as well as the
lenders who will, through their support

{{00:05:42}}
of the corporates on the transition and
providing them the financing that they

{{00:05:46}}
need, that will very much encourage
Accelerated shift around the transition.

{{00:05:54}}
Now the regulations, when you
look at them, a lot of them are

{{00:05:56}}
actually directed at asset managers.

{{00:05:58}}
And so it's being forced through
the financial ecosystem to actually

{{00:06:03}}
get the real economy to transition.

{{00:06:05}}
So there is a distinct link but at
the same time we are going to see some

{{00:06:10}}
reiterations of those regulations to
ensure that they are actually hitting.

{{00:06:15}}
the note, because what we don't want is
that these regulations become a compliance

{{00:06:19}}
exercise and that you're just tick boxing
it or reporting it versus actually living

{{00:06:24}}
it and then working with the respective
investee companies to decarbonize.

{{00:06:30}}
Excellent.

{{00:06:30}}
So how can you encourage adoption
of this across the industry?

{{00:06:36}}
The adoption, it's you
need to incentivize it.

{{00:06:40}}
Now, but the incentives come in
multiple guises, if you will.

{{00:06:45}}
There is obviously the financial, but
I think especially as you move into

{{00:06:49}}
the SMEs, what's important is actually
helping them understand the issues

{{00:06:53}}
and giving them the respective tools.

{{00:06:56}}
These are in the form of digital, tools.

{{00:07:00}}
For example, at NatWest, we have
something called Carbon Planner.

{{00:07:03}}
that we're working with the SMEs,
where they can upload actually their

{{00:07:07}}
carbon data, both scope one and two
and enables them to start the journey.

{{00:07:13}}
There's something else also that is called
SPTI, or Science Based Targets Initiative,

{{00:07:18}}
and they would like the larger corporates
already to set very distinct targets.

{{00:07:24}}
What they have realized is, and
comes back to my earlier point,

{{00:07:27}}
there are going to be different...

{{00:07:29}}
Maturity profiles along this journey
and the SMEs need sort of guidelines,

{{00:07:35}}
stepping stones to get through that.

{{00:07:38}}
And so what they've said is if a SME
could initially just commit and just

{{00:07:42}}
sign up as the first step, the second
step is then actually monitoring it.

{{00:07:47}}
And after a three or four year period,
you would then actually set a target.

{{00:07:52}}
So it really gives a clear roadmap
that these companies can follow.

{{00:07:56}}
And that will obviously help.

{{00:07:58}}
with the adoption.

{{00:07:59}}
Excellent.

{{00:08:00}}
You mentioned something there as well,
but looking at NatWest what kind of

{{00:08:03}}
initiatives have you put in place there
to ensure sustainability, not just

{{00:08:07}}
in the business, but also with, to
help customers achieve that as well?

{{00:08:10}}
As always, the first place of
how do you Do that yourself.

{{00:08:15}}
You have to look internally first.

{{00:08:16}}
And when we first started on
the climate journey, it was very

{{00:08:20}}
much get your house in order.

{{00:08:22}}
And that starts with your
own operational footprint.

{{00:08:24}}
And what does that actually equate to?

{{00:08:28}}
Very much NatWest has taken
on renewable energy as its

{{00:08:31}}
primary source of electricity.

{{00:08:33}}
And that also gives you a...

{{00:08:35}}
a very good learning position as
you start to communicate with your

{{00:08:40}}
customers and enable them to transition.

{{00:08:43}}
So one of the things I talked
about was Carbon Planner to

{{00:08:46}}
really enable the corporates to
start monitoring their own data.

{{00:08:51}}
The second is obviously working with
the retail customer on their mortgages.

{{00:08:57}}
We provide a green mortgage product.

{{00:09:01}}
And similarly in the SME space
is looking at the retrofit.

{{00:09:06}}
loans to enable them to actually have
financial means to do the retrofits that

{{00:09:12}}
either their operations require to make
them a much more sustainable entity.

{{00:09:18}}
Excellent.

{{00:09:19}}
And just to finish off Net Zero has been
in the news again quite a lot recently.

{{00:09:23}}
What would you say financial services
in general really needs to do to

{{00:09:27}}
achieve that in the, maybe not so much
near term, but close to near term?

{{00:09:30}}
I think it's really important.

{{00:09:31}}
Financial institutions are
actually intermediaries, enablers.

{{00:09:36}}
It's, we help finance the real economy.

{{00:09:40}}
And so we can only operate
in that sort of context.

{{00:09:44}}
And so the more we do to help
our customers transition, the

{{00:09:47}}
more that we actually enable
the real economy to decarbonize.

{{00:09:51}}
And that obviously will be evidenced
in our On our balance sheet, NatWest

{{00:09:57}}
made a commitment around the 50 percent
reduction of its emissions by 2030.

{{00:10:03}}
Similarly, we're looking at
our mortgages to have an EPC

{{00:10:06}}
of C or above by 2030 as well.

{{00:10:11}}
So we have underlined it with
specific targets and commitments,

{{00:10:15}}
the macro environment that we are in.

{{00:10:20}}
And so really the, essence, and this
is I think where the asset managers

{{00:10:25}}
come back to as well, is really having
those conversations and really having an

{{00:10:30}}
exchange and almost a compassion for those
companies as they go through that journey.

{{00:10:37}}
Excellent.

{{00:10:38}}


{{00:10:38}}
Sounds great.

{{00:10:38}}
Caroline, thank you again so much for
taking the time out to speak to us.

{{00:10:41}}
It's been a pleasure.

{{00:10:42}}
Thank you.

{{00:10:42}}


{{00:10:42}}
Thank you very much.

This is Fintech Futures at
Sibos, Caroline Haas of NatWest.

Caroline, thank you so much for
taking the time out to speak with us.

Just to get started, I'd like
to give a quick introduction to

Thank you very much for asking
me to come to this afternoon.

SD capital markets team within
NatWest where we really do cover

all ranges of customers from the
corporates, the financial institutions

out to private equity and really
service them on what they need

And you're here speaking on a panel about
building standards into green finance.

For those not in attendance, would
you be able to give us a quick rundown

of what was covered there and some of
the key takeaways that came out of it?

It's interesting for years
we've all wanted standards

And now, ironically, there's this
little bit of a pushback saying,

We need a combination of and this space
is so new that actually You need guidance,

you need standards, you also need them to
be regulatory versus just voluntary, and

then you almost need to do a review and a
slight reform of what was initially done.

We've just seen that actually on the
SFR SFDR regarding Article 8 and 9.

So I think I really welcomed in COP26
when the ISSB was initially announced,

and it was fantastic to see even after 18
months them to release the standards or

the suggested metrics, KPIs around S1 and
S2, one being more sustainability and the

Now, obviously, we need to bear
in mind that there are going to

have to be differences if that
is between large corporates and

Similarly, that there's going to have
to be adjustment between the developed

and the respective metrics that are
going to be required accepting that

there are different materiality
or maturities along those.

Excellent, And NatWest has just
recently published its Global

Can you tell us some of the
top level findings from that?

So I think it's always funny,
People maybe I'll take a step back.

The survey went out to 225 asset managers.

It was actually very equally
split between a third, being

And what was very welcoming to
see is that 71 percent of the

respondents actually said that
they had made net zero commitments.

What was also interesting was to
hear that 39 percent of them felt

I would say there is definitely a tendency
that one will point to Europe being

further ahead followed by the US and
then a slight lag coming through APAC.

I think that was definitely
reconfirmed, at the same time it was

asset managers actually have come
on stream over the last 18 months.

The other key takeaway I would say is
how much they're using the raw data.

Often it is assumed that the ESG ratings
are feeding into those investment

decisions, when actually it's the ESG
scorecards that each asset manager creates

for themselves, and they use the data
that flows in through the data providers.

So I think it was a lot of reaffirmation
for us what again was slightly called out

is that although regulation is helpful, it
is also at this point slightly confusing.

Excellent What would you say would
be the most important thing then

So staying on the decarbonization and
climate theme, I think what's interesting

is how often we now hear, what are
the transition plans of the entity

Now, obviously a green narrative
is lovely, but actually we really

People like to focus on a scope
1, 2, or now, in the future, or 3.

But it's actually, how
are they going to do that?

And how is that going to
affect their supply chains?

How are they going to actually
communicate that and hold their management

The other piece is, I think, how
that now relates into the products.

It's transparency that is the
key point that they call out.

SLBs are obviously a newer product
versus the use of proceeds bonds.

And how do you make those robust
material and really something

And the final thing I would call out
is clear disclosure and reporting

and obviously the standards
that I talked about on ISSB will

Right now it is very qualitative and
obviously very verbal in a way versus

And once that happens, you can benchmark
more easily and decide who are the

So when you take all of that together,
I think the asset managers some of the

sort of institutional investors, pension
funds, insurance companies, what they're

really trying to use engagement is to find
out those pieces of information that will

So what are some of the impacts
of decarbonisation frameworks

on fund managers and how is this
aligned to reporting standards

As much as regulation is going to drive
this, it is going to ultimately be

the investing community as well as the
lenders who will, through their support

of the corporates on the transition and
providing them the financing that they

need, that will very much encourage
Accelerated shift around the transition.

Now the regulations, when you
look at them, a lot of them are

And so it's being forced through
the financial ecosystem to actually

So there is a distinct link but at
the same time we are going to see some

FinTech Futures

Expert Insight

At the Sibos 2023 conference in Toronto, FinTech Futures sat down with Caroline Haas, Head of Climate and ESG Capital Markets at NatWest, to discuss the importance of net-zero strategies for financial services firms and how clear climate-focused initiatives and reporting processes can help retain and attract fixed income ESG investors.