NatWest, update your policy!

The letter

Re: NatWest Group defence sector policy

Dear Ms. Rose,

On behalf of more than 40 organisations, we want to encourage a change to your controversial weapons policy. It is now more than seventy-five years since the indiscriminate destructive force of nuclear weapons were first unleashed on the planet. Nuclear weapons remain a grave threat to people and the planet. Those affected by the development, manufacture, testing, deployment and use of nuclear weapons, and their children, carry the scars of this heinous weapon in their bodies. Much of the environmental harm is far-reaching and irreversible. The soil and water in places from Algeria to Australia to Nevada and Novaya Zemlya will never be ‘normal’. 

Experiments with nuclear weapons inform us that a single nuclear bomb detonated over a large city could kill millions of people. From the use and testing of the bomb we know survivors are exposed to radioactive fallout, causing serious long-term health consequences.  A nuclear war using less than 0.1% of the explosive yield of the current global nuclear arsenal would bring about devastating agricultural collapse and widespread famine.  

An understanding of these risks led 122 countries to support a total ban on nuclear weapons in 2017, through the adoption of the United Nations Treaty on the Prohibition of Nuclear Weapons. The treaty entered into force on 22nd January 2021. In addition to triggering states parties’ implementation of the treaty, past precedent with other weapon prohibition treaties has demonstrated that it will also influence non-party states’ behaviour.

Strong policies that exclude investment in producers of controversial and indiscriminate weapons help to manage risk within portfolios. In our view investments that are exposed to the production of controversial weapons have inherent fiduciary and reputational risk.  Nuclear weapons also increase the level of systemic risk to society as a whole. The defence sector is frequently implicated in human rights violations and investors often find companies in the sector to be secretive and opaque, for example as noted by the Investor Advocates for Social Justice. 

We commend the Group for acknowledging the controversial nature of nuclear weapons in its current Defence Sector Policy. However, the policy is not strong enough to prevent investments in nuclear weapon producers. The policy should exclude nuclear weapon producers in their entirety to ensure that the financial services provided to a company do not benefit the production of nuclear weapons. A change in policy now would be an important milestone on the road to becoming a purpose-led organisation championing the potential of people, families, communities, cities and businesses.  Nuclear weapons put all these things at risk.

We hope you agree that updating the Defence sector policy and divesting from companies that have significant involvement in the production and maintenance of nuclear weapons is in line with the Group’s history of commitment to responsible business. The Group is a founding signatory to the UN Principles for Responsible Banking and has thereby committed to aligning its business to the UN Sustainable Development Goals and to “work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations”. Investing in nuclear weapons contradicts this commitment, given the threat that nuclear weapons present to the environment and to future generations.

We look forward to the opportunity to discuss this issue with you further.

On behalf of the following signatories,

Background Information

In the period January 2018- January 2020, Natwest had over £1.8 billion in outstanding loans to 11 nuclear weapon producers, a tiny fraction of its overall lending.

To put that into context, in 2019, the group lent £158.9 billion to personal banking customers and £101.2 billion to commercial clients.