The present invention provides binder compositions comprising an ethylenically unsaturated carboxy acid grafted lignin or lignosulfonate component, and an oxazoline-functional group containing polymer or resin component, the two components in a solids weight ratio of from 50:50 to 98:2. As formulated, the compositions may comprise from 40 to 98 wt.% of the acid grafted lignosulfonate, preferably, 50 wt.% or more. Preferably, the binder composition further comprises one or more in situ acid generator compound to insure more rapid cure on heating or pressing. The binder enables the provision of low cost composite materials comprising a majority component derived from natural materials, and having a reasonable wet strength.