Build a Brighter Future

Deliver products and services that help our customers make a positive impact on society and the environment.

Supporting society for the long term

We want to empower our customers to take control of their money, providing innovative tools, products and services that help them make sustainable long-term decisions. As part of this, we are aspiring to at least halve the carbon emissions across everything we finance by 2030 and do what is needed to align with the 2015 Paris Agreement.

Our starting position is strong with low levels of lending to carbon-intensive sectors but there remains work to do to fully understand how we will get there. We envisage our approach will incorporate green products and funding, and targeted lending growth as well as addressing residual carbon.
We have begun engaging with customers, colleagues and industry forums to accelerate our thinking and build our plans.

Fast Facts.

2030 Aspirations

  • At least halving our carbon emissions across everything we finance.
Short > Medium Term Targets

  • 5% of business loan book comprised of sustainable leaders by FY22.
  • (Baseline: c.2.8% of business lending to sustainable leaders based on pilot of beta Sustainability Benchmarking tool).
  • Short to medium term targets for our mortgage book are under development.

Mortgages – Greening your Home

We know we have an important role to play in helping our mortgage customers reduce the carbon footprint of their homes. With 15% of UK carbon emissions coming from heating our homes, we developed information and guides on ‘greening homes’ which we are making available to first-time buyers through our new Home Buying Coach app, and will expand over the coming months.

Our mortgage book presents a sizable opportunity, but our aspiration to at least halve emissions across everything we finance by 2030 is stretching and the pathway to get there is not yet clear across the industry. We have begun work to better understand the carbon intensity of our mortgage book, sourcing energy performance certificate (EPC) data and engaging with external forums, which will help us establish a detailed roadmap for our loan and investment-related Scope 3 emissions.

Partnership for Carbon Accounting Financial (PCAF)

We have become members of PCAF to work with other UK banks to develop and implement a harmonised approach to assess and disclose the GHG emissions associated with our loans. We are focusing first on mortgages, which make up 81% of our lending, and agriculture, which is 2%. The harmonised accounting approach provides financial institutions with the starting point required to set science-based targets and align their portfolios with the Paris Climate Agreement.

Business Lending

Future Fit Development Council

We were the first bank members of the Future-Fit Development Council and have been working with Future-Fit to build a benchmarking tool for businesses to measure their progress against meeting the UN SDGs. The tool will evolve to provide support with tangible improvement actions. We have already piloted the tool with 100 customers to ensure we calibrate it in a way that means only businesses which are deemed to be at the forefront of sustainability can benefit from reduced cost of capital and increased access to finance.

Following the pilot, we estimate that 2.8% of our business loans are currently provided to firms whose core activities materially enhance progress against the UN SDGs. This is measured using the beta version of our Virgin Money Sustainability Benchmarking Tool. During the year we will enhance coverage of our commercial loan book and capture and extend the use of the data generated by the tool to measure progress in ESG in our customer base.

Business Banking Renewables

Our Renewable Energy team manages a book of over £100m* and our plans envisage growth in this portfolio to £320m by FY25, projected to be materially in excess of overall loan book growth. Our lending to carbon-intensive sectors is relatively low, and this year we have increased transparency to our stakeholders by publishing our Sensitive Sectors Policy Statement.

*Renewable borrowing covering a diverse range of renewable energy generation, excluding the £50m of lending within the Agriculture loan book advanced specifically to fund renewable energy projects.