Sensitive sector statement

Environmental and climate consciousness are aligned to our purpose, supported by our Beacon for mutual good strategic driver, and our Mutual Good Commitment – we aim to build a more sustainable world by supporting progress towards a greener society. We aim to do business in a way that positively impacts our customers, employees, and communities, and seeks to reduce our impact on the environment.

The purpose of this Statement is to make it clear who we lend to, and how we view potential clients who are operating in sensitive sectors.

The operations of Nationwide, including Virgin Money, are all UK-based, as are most of our business customers. We allow non-resident lending, and lending to non-UK-registered companies whose business activity is located in the UK, subject to additional controls.

The environmental and social impacts of providing financial services to our business and personal customers are mainly indirect. Even so, we are committed to working with our customers to understand their impacts, as well as their approach to environmental and social sustainability. This includes customers who are involved in agriculture, a sector in which Virgin Money has long enjoyed an established presence and high relative market share. Virgin Money’s lending within the agriculture sector is only to businesses operating in the UK. Similarly, Virgin Money’s lending within the fishing sector is only to businesses based in the UK and operating out of the UK. Customers operating in these sectors are subject to applicable UK legislation and relevant regulation.

We will continue to assess emerging sensitive sectors and revise this policy statement as appropriate to reflect ongoing developments.

The objective of risk management is to keep Nationwide safe, to ensure resilience and to put customers’ interests at the centre of our decision making.

We control our credit risk by limiting the amount of risk we're willing to accept, while pursuing our strategic objectives. To do this, we first define a set of qualitative and quantitative limits in relation to our credit risk concentrations – whether to one borrower, a group of borrowers, or within geographical, product or industry segments. These limits become our risk appetite settings and are reviewed and approved annually by the Board.

Across our business lending, credit risk is managed through:

• Ongoing approval and monitoring of individual transactions.
• Regular asset quality reviews.
• Independent oversight of credit decisions and portfolios.

The impact on and risk from climate change, together with other environmental and social risk considerations, are factors we consider when assessing the credit risk of our customers. Such impacts and risks are not usually a material issue for most of our business lending loan book, which is predominantly made up of small to medium-sized businesses (by volume) located in the UK.

We manage the credit risk associated with lending by applying detailed lending policies and standards. These outline our approach to lending, underwriting criteria, credit mandates, concentration limits and product terms.

We take a flexible approach to credit management across our business lending portfolio. If issues are identified, or if credit performance deteriorates (or is expected to) due to borrower, economic or sector-specific weaknesses, we will work with our customers to support them through these periods.

Roles and responsibilities for the management, monitoring and mitigation of credit risk are clearly defined. Significant credit risk strategies and policies are approved, then reviewed by relevant delegated authority holders or committees.

Anticipating tomorrow’s risks is key within our credit assessment process. That is because our lending will be repaid from future cash earnings. Our assessments seek to:

• Identify relevant legislation and / or regulatory requirements that may affect a customer’s business activities.
• Assess the procedures and policies a customer uses to identify and manage any environmental and social risks they face.
• Identify sites where the customer may be subject to environmental licensing or regulatory requirements. We also look at their current or historical activity, which may lead to contamination and environmental liability.
• Consider the physical and transition risks of climate change.
• Predict any changes, negative and positive, in social expectations on a customer’s business. This includes anticipating when engagement with that customer might lead to damage (or enhancement) to Nationwide's reputation.

We expect all our customers to comply with applicable legislative, regulatory, and licensing requirements.

Environment and social risks (including climate change) affect all businesses or are likely to in the future. We can have an important role to play in facilitating the country’s transition to a low-carbon economy, while leveraging the opportunities and managing the risks we are exposed to from climate change.

Our internal Emissions Reduction policy¹ is aimed at supporting businesses, in our highest emitting sub-sectors, to transition towards a net-zero economy. The policy applies to larger borrowing customers in the highest emitting sub-sectors within Manufacturing, Resources and Transport and Storage. Customers must provide scope 1 & 2 emissions² and have in place emission reduction plans as a condition of lending. This includes Oil & Gas aligned customers.

We have identified the highest risk sectors and have limited (or eliminated) our exposure to them. Lending to businesses that offer support services to these sectors – such as labour supply, equipment, transport, technical and professional services – is permitted. These sectors are outlined below:

We do not lend to adult entertainment services including escort agencies, sauna or massage parlours, and lap dancing or similar clubs.

We expect customers to comply with legal requirements and voluntary standards related to animal welfare. We do not lend to businesses trading in:

• Wildlife and endangered species (or products made from them).
• Commercial, non-healthcare-related animal testing (including cosmetics testing).
• Fur products and activities (except regulated, commercial farming activities).

Due to the ethical and social risks, we do not lend to businesses that are involved in the manufacture or sale of weapons, which are subject to a treaty or convention, to which the UK Government is a signatory (such as antipersonnel mines and cluster munitions, as well as nuclear, biological, and chemical weapons).

We will lend to businesses that supply into the global defence sector subject to being satisfied that these businesses hold all necessary permissions to operate in this sector. We will also lend to businesses that manufacture or sell firearms for sporting use, or for personal ownership, providing all required licensing is held.

We do not lend to digital currency issuers, including digital currency service providers and dealers.

We do not lend towards non-sustainable, large-scale deforestation activities for alternative land use purposes, including food, soya and palm oil production.

We do not lend to gambling companies operating in jurisdictions where gambling is prohibited by law, or online gambling businesses that are not government regulated

We will not provide development finance to material projects that result in damage to protected areas, including:

• UNESCO World Heritage Sites that are listed as "in danger," unless the organisation has explicitly agreed to the project.
• Ramsar Wetlands Sites that are under threat - specifically special characteristics designated under the RAMSAR Convention on Wetlands of International Importance.

Material projects are defined as projects with significant negative environmental, social, or economic impact that do not have the necessary authorisations or permissions in place.

We do not lend to coal-fired power plants.

We do not lend to businesses involved in the exploration, extraction, or mining of coal, whether on the surface, or underground. Nor do we lend to businesses involved in the wholesale trading of precious metals and minerals including gold, silver, platinum, diamonds, emeralds, and rubies. Businesses directly involved in Deep Sea mining for any resources are also not supported.

Mining, quarrying and extraction of other mineral resources, where all required licensing is held, is permitted. Lending to the mining and minerals sector is restricted to UK-based businesses.

We do not lend to businesses that generate revenue directly from oil and gas extraction (including extracting oil from oil sands, arctic oil drilling, or gas from hydraulic fracturing).

We do not lend to tobacco farming or manufacturing businesses.

Last updated: May 2026