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Let's be friendsThis page aims to provide some key background information for the campaign. It also provides you with the opportunity to share useful links with others (see below).
The Royal Bank of Scotland Group (RBS)
Will RBS investments tip the world’s climate over the edge?
The Royal Bank of Scotland (RBS), is one of the largest companies in the world. According to Forbes Global 2000 in February 2008 it was the 10th biggest company on earth. According to the Financial Times, it is the biggest company in the world if you only measure assets. RBS owns a number of other high street brands, including NatWest, Direct Line, and Churchill Insurance. It also owns Citizens Financial Group, one of the largest banks in America.
In 2008, RBS nearly went bankrupt and the government bailed them out leaving British taxpayers with a 70% ownership of RBS. Following another round of bailouts in November 2009, the Treasury now controls an 84% stake in RBS - which has been described by City Minister, Lord Myners, as the “worst-managed bank this country has ever seen”. The government also bailed out other banks, including Lloyds Banking Group, Bradford and Bingley, and Northern Rock. The Treasury has set up a company to manage it’s shares in these banks - United Kingdom Financial Investments (UKFI).
NatWest call themselves “the UK’s leading bank for students”, and have more branches on UK university campuses than any other bank. The bank needs students - both as potential customers who stay for life and as future employees. This means that students can play a unique role in pushing for change.
RBS’ headquarters are in Edinburgh, where they are one of the city’s biggest employers. The Chair of the company is Phillip Hampton, and the Chief Executive Officer is Stephen Hester. Both have been appointed since the bail out.
Along with the Clydesdale Group and The Bank of Scotland, RBS prints their own bank notes for Scotland.
The Credit Crunch
The ‘credit crunch’ happened when banks around the world collapsed. For an explanation, see this video. There were a number of causes of this, including irresponsible lending practices and a lack of regulation.
When these banks collapsed, the UK and American governments poured billions of pounds into them, essentially buying them rather than letting them go bankrupt. The credit crunch then led to a recession as people and companies spent less money, both because they found it harder to borrow, and because they were concerned about their future, and so saved more.
The Equator Principles
RBS sometimes defend themselves by pointing out that they have signed up to the ‘Equator Principles’. The Equator Principles are a set of agreements signed by financial institutions, which purport to uphold certain environmental standards.
“A…benchmark for determining, assessing and managing social & environmental risk in project financing”*. The Equator Principles website
There are 54 banks and financial bodies around the world currently signed up to the set of guidelines, including RBS. They state that before engaging in a project an Equator Principles Financial Institution (EPFI), must conduct a risk assessment report based on internal guidelines and that they must create an Environment Management Plan to mitigate, monitor and manage those risks. Whilst the Principles are, in theory, a good thing, the problem is that they make no real difference. The Baku-Ceyhan pipeline, financed by eight EPFIs, including RBS, was criticsed by international NGOs for having 157 breaches of the Principles even though the International Finance Corporation (IFC) and other EPFIs signed off on the project.
More information on the Equator Principles can be found on The Equator Principles website and on Wikipedia.
Other resources
This section gives you a chance to read more about the credit crunch and climate change. If you have any articles or resources about this that you would like to share with the network, then get in touch through the form below.
You can email us resources and links to be uploaded onto this page (and shared with the network) here:
For more indepth online discussion, please visit the People & Planet online forum.
Links and Resources
Economist Howard Reed explains ‘What the “nationalisation” means’
Letter to the Guardian (which was published) from a coalition of NGOs and campaigning organisations, including People & Planet and Platform, highlighting the urgent need for environmental regulation as well as financial regulation.
New banking rules should reveal emissions from investments. Environmental campaigners concerned that tax payers are potentially bankrolling highly polluting projects
Kevin Smith (Platform): The Bail-Out of Banks Should Include Environmental Stipulations, The Guardian, arguing that the government’s bail-out of RBS must be made conditional upon the bank’s reduction of fossil fuel investments.
Kevin Smith (Platform): From Casino Economy to Green Economy, The Guardian. Why the government should use its position as major shareholder to push for change from within.
What would the bank-bail out money buy for the environment? Up to $4 trillion has been committed to rescue the global economy. How could that money be spent on the environment? The Guardian
Our banks are too important to be left in private hands. The case for public ownership has grown overwhelming - but Brown is hamstrung by ideological baggage. The Guardian
State takes majority stake in RBS - and £2.8bn loss, The Guardian
City minister insists bail-out banks will be free from Treasury scrutiny, The Guardian
RBS bosses apologise to shareholders, The Guardian
‘Credit crisis is time to act on climate change, says Lord Stern’, in the Telegraph arguing for investment in renewable energy projects.
Environment watchdog urges Obama-style Green New Deal, The Guardian
Mark Lynas on the importance of putting climate change at the heart of economic recovery, The Guardian
‘UN says credit crisis could enable “green growth”, Reuters UK
Special Report: How our economy is killing the earth , New Scientist
‘Meltdown? The ill wind is bringing ethical banks nothing but good’, The Guardian
Prince Charles gets in on the action! Even royalty urges action on the ‘climate crunch’, CNN
