Our reaction to RBS – Rebuild your brand by going fossil free
December 8, 2014
Dear Andrew Cave,
Many thanks for your response to our campaign regarding the public demand for divestment from fossil fuels. It’s great to hear you welcome customer feedback and engagement on this critical issue.
RBS’ commitment to transparency in this area is clear, and represents an excellent start in the move to a more sustainable future. We also recognise and celebrate RBS’ high standing on the Transparency International index, as well as your statement that RBS recognises “the crucial role we can play to help our society to transition towards a low-carbon economy,” which is again a step in the right direction.
As you mentioned, there remains a lot to do in this area. For example, whilst we welcome your engagement with the Smith School of Enterprise and the Environment, we believe that the public and your customers should also be consulted on these issues too, as the Cooperative Bank have done. This is particularly the case for RBS, given that the public is not only the number one stakeholder in your bank, but also the main shareholder too. Are the results of your consultation with the Smith School public? If so, please provide a link.
Decreasing your lending to the energy sector by 65% is laudable, though it would have been preferable for environmental, economic and financial reasons if that lending had been redirected to renewables, rather than cut completely. Furthermore, if 35% of your energy assets are held in fossil fuel companies, your own lending figures suggest that RBS continues to hold more than £5.6 billion directly in fossil fuel companies.
Whilst this may be a small portion of your total assets, it does a great deal in driving the extraction and use of fossil fuels. This is pushing our world closer to a 2ºC increase in global temperatures, a watershed that will tip us into irreversible climate crisis that will have dire social, environmental and financial consequences.
Being the top provider of project finance in the UK between 2011-13 is a fantastic achievement, and one that RBS should rightly be proud of. Is your position as the top lender calculated by capital volume lent to projects, or as a proportion of your total assets? It would be instructive to know both figures, so as to compare them with your continued investments in fossil fuel companies.
With regards to coal investments, Move Your Money welcomes your decision not to invest in Mountain Top Removal, nor the Abbot Point coal port, both of which are environmentally and socially catastrophic projects.
That said, we find it disappointing that your exposure to coal investments is not included in the 2013 sustainability report that you cited in your response to our campaign. According to the International Energy Agency, coal is “nearly twice as emission intensive on average” in comparison to gas. RBS recently was found to be the third largest bank investor in coal between 2005-2014.
Your commitment to transparency and to investing in renewable energy demonstrates bold leadership, which must be advanced if RBS is serious about its commitment to being “the number one UK bank for trust” and to “acting responsibly.”
Sadly though, you declined to respond directly to your customers’ call to commit to divestment from fossil fuel extraction companies. As such, we reiterate our call on RBS to:
- Disclose all of RBS’ investments in the fossil fuel industry within three months; and
- To commit to a 5-10 year plan to divest from fossil fuel investment within three months
In the absence of such commitments, we will have no choice but to continue to recognise RBS as a key driver of climate change and fossil fuel extraction. This will remain the case until you have made a solid, lasting, and credible commitment to fossil fuel divestment, as outlined above.
More and more high-profile institutional investors are leading the way on divesting from fossil fuels, from Norway’s largest pension fund, through to giant multinational corporations such as Unilever, Nestlé, Nike, Marks & Spencer’s and IKEA.
The evidence increasingly suggests that divestment is a sound financial decision that could actually help to strengthen your bank further, as well as contributing to environmental and social sustainability. Other sectors are showing true leadership in divesting from fossil fuels, and RBS faces a fantastic opportunity to rebuild trust in its brand by leading the UK banking sector and committing to divestment.
I hope that you will use your position as Chief Sustainability Officer to secure these pledges from RBS, and that your commitment to building a secure, stable and fossil-free future is as genuine as ours.
Yours in hope and with warm regards,
Move Your Money UK