The lender launched an expanded agreement with Groundsure to start screening commercial transactions in the UK for climate change risks earlier in the year.

This followed the prospect of greater regulatory compliance and the Bank of England’s exercises to assess the resilience of major UK banks as well as proposals to ensure banks do not underestimate long-term risks from climate change.  

In a blog post last month, Groundsure director David Kempster said: “[The Bank of England] has already asked lenders to check their back books. The next stage will be to oblige lenders to check how much the properties upon which new loans are set will be affected by climate change.”

Kempster has also previously highlighted that lenders have been playing their part in the fight to combat climate change. By way of example, we’ve seen a massive growth of green mortgages.

“But lenders must prepare for the results if we do not get off the fast track to climate disaster…Lenders need to start screening their property transactions for risks represented by climate change,” he explained. 

NatWest has been using the new Siteguard Climate report, which includes a four-tier risk assessment summary with explicit opinions on environmental liability, loan security risks and potential property value impacts. 

It also provides an assessment of the physical climate risk from flooding today as well as the risk that’s projected forward over the medium- and longer-term. 

In a joint statement, NatWest’s Jonathan Batt and James Bretten say: “The Siteguard Climate service has bedded into our operation and across our valuer network well. It has enabled the bank to provide an effective solution and a catalyst for managing forward physical risk. We are now planning to expand into other evolving risk data, together with Groundsure, to ensure we forge ever more sophisticated oversight and due diligence on commercial transaction risks.”

Groundsure chief executive Dan Montagnani explains: “This is an excellent example where we have embedded our climate data into a major bank to meet their compliance and due diligence obligations at scale, for their commercial portfolio.”

“It’s great to be discussing ongoing enhancements to the support to ensure that NatWest stays ahead of the curve, as well as delivering more certainty about exposure on lending decisions – there is a new urgency to expand climate data to meet regulatory compliance,” Montagnani adds.