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Money and climate change. Banks and the green agenda. Cash and sustainability. The link might not seem that obvious. But the responsibility to tackle climate change rests with us all. Every single government, every single business, every single person.

At Virgin Money, it’s a non-negotiable and it’s a role we’re taking seriously, to ensure we become a greener bank. For us it’s more than just an opportunity – it’s our moral duty to help customers and communities on the road to a greener future, doing what we can to be a force for good in society.

But what does that actually mean? Well, we know we are all on a journey to better understand how we can personally and collectively contribute to being greener. But time is not on our side, so we think we need to pick up the pace and start working together. For us, this means leading by example. Virgin Money can set the tone in terms of our values and what we stand for through our products, who we lend to and the activities that we fund.

Becoming a greener bank

With our purpose of ‘making you happier about money’ front of mind, we launched a revitalised Environment Social Governance (ESG) strategy just under a year ago. It sets out our intention to accelerate the difference we will make towards addressing the global issues facing our planet and the local issues facing our communities in which we operate, to make Virgin Money a greener bank. The closer we can bring the two, the better off we will all be.

So, with a new strategy on which we worked closely with our customers, colleagues and suppliers, and an ambition to drive positive social and environmental impact through everything we do, the big four goals we believe will create a tangible impact are:

1. ‘Putting our (carbon) foot down’

This recognises the urgent need to reduce our negative impact on the planet. We’ve signed up to the United Nations’ Net-Zero Banking Alliance, an industry-led, UN-convened alliance of banks worldwide, committed to aligning their lending and investment portfolios with net-zero emissions by 2050 or sooner, in line with the most ambitious targets set by the Paris Climate Agreement. Our commitments and aspirations over the next 10 years also include at least halving the carbon emissions across everything Virgin Money finances.

As a responsible bank, we have become a signatory to the United Nations’ Principles for Responsible Banking (UN PRB) and are committed to aligning our business with the Paris Agreement on Climate Change. We’ve also joined the Partnership for Carbon Accounting Financials (PCAF) to assess greenhouse gas emissions from its loans, focusing first on mortgages and agriculture.

We are also one of the first companies to purchase green gas, helping to reduce carbon and greenhouse emissions, and it’s 100% renewable. It is sourced from agricultural materials, food waste and wastewater.

2. ‘Building a brighter future’

This focuses on creating products and services that help our customers make a positive impact on society and the environment. We’ve made progress from a starting point where less than 0.1% of lending is to carbon-related businesses. We became the first UK bank to join Future-Fit Foundation’s Development Council and have been working with this not-for-profit organisation to build a benchmarking tool for businesses to measure their ESG progress against the United Nation’s Sustainable Development Goals. And importantly, the Sustainable Business Coach, which can be downloaded from the Apple App Store and Google Play Store, is an easy first step to help any business of any size to start tracking their high priority sustainability goals and measure their progress. It’s also free to access for all UK businesses including SMEs.

Earlier this year, we launched Sustainability-Linked Loans which reduce the cost of finance for businesses who help the economy transition to a more sustainable model. Virgin Money is the first bank in Europe to use a science-based methodology to appraise eligibility. Together with Carbon Metrics we’ve conducted a series of on-farm carbon audit pilots for our agriculture customers. These audits analyse existing farms’ data to generate a targeted management plan, highlighting key areas in which businesses can improve and combat carbon-intensive outputs. The audits developed our own relationship managers’ knowledge of carbon audits, meaning their expertise can help future customers.

We’ve also launched a range of greener mortgages on new builds for first and next time buyers and, through our partnership with Carbon Neutral Britain, for every mortgage which completes we will fund environmental projects that reduce emissions and offset the equivalent of 12 months of home emissions. This means that each completed Greener Mortgage will fund sustainability projects around the world and Virgin Money also aims to fund the planting of 100,000 trees.

3. ‘Open doors’

This is designed to encourage greater diversity in our business, as well as supporting the sustainable practices and economic activity that create shared prosperity for all. Our aspiration is that no Virgin Money customer will be paying a poverty premium by 2030 and that’s why we’re partnering with Fair By Design and the Global Open Finance Centre of Excellence (GOFCoE), collaborating on their national measure of Poverty Premiums, as the primary data partner. We’ve already initiated a pilot with customers about the potential to reduce their energy bills through switching tariff and payment method. As well as developing new, targeted solutions to those impacted by the poverty premium, we’ve also launched a market-leading basic bank account - M Account.

We’ve a zero-tolerance approach to slavery, servitude, forced labour and human trafficking (modern slavery) and are committed to conducting business with honesty and integrity, treating everyone with dignity and respect.

The Virgin Money Foundation (VMF) continues to support local people in creating positive change in their community. Last year it awarded some £1.5m in grants to charities supporting local people, including £872,000 for community organisations responding to COVID-19.

As part of our Charity of the Year partnership with Macmillan Cancer Support, we are piloting ‘Macmillan Guides’. These are colleagues who have received specialist training from Macmillan to help people living with or supporting someone with a cancer diagnosis. We’re also piloting a two-way referral process with Macmillan’s financial guidance team.

4. ‘Straight up ESG’

This recognises the importance of transparency in how Virgin Money pursues our sustainability agenda. We are continuing to make tangible progress on our commitment to comply with the Task Force on Climate-related Financial Disclosures, including the addition of an ESG scorecard into long term incentive plans in 2020.

We know that becoming a greener business isn’t the work of a moment and requires constant attention and action. What our strategy provides is a foundation to firmly embed sustainability in everything we do and we’ve focused our approach on where we believe we can make the biggest difference.

We will continue to work with customers, colleagues, our partners and communities to encourage sustainable practices and economic activity that creates shared prosperity, helps to open doors for everyone in society and safeguards the future of our planet. It’s up to all of us to get this right.

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