The Oil Bank of Scotland: Why RBS?
People & Planet has been campaigning to shift RBS investments from dirty fossil fuels to clean, renewable energy since 2008. There are two main reasons why they are the key target of our Ditch Dirty Development campaign.
1. RBS has the worst record of all UK banks
The Royal Bank of Scotland, (RBS), which owns NatWest, is a hugely significant funder of fossil fuels. Between 2001 and 2006, RBS provided over $10 billion in loans to oil and gas projects. The embedded carbon emissions resulting from these projects in 2006 were greater than the carbon emissions for the whole of Scotland.
Since the government ‘bailed-out’ RBS, they have continued to pour funds into fossil fuel extraction. For example, they pumped $100 million into oil extraction on the Congo/Uganda border in March 2009. Over £10 billion of public money has been spent on projects and companies linked to climate change and human rights violations.
RBS has historically positioned itself as ‘the oil and gas bank’. With dedicated oil and gas offices, RBS has significant experience and expertise in the sector, and provides crucial services to oil and gas companies. Working as a hands-on partner to the industry, RBS structured the loan agreements and acted as financial adviser on over $30 billion of projects between 2001 and 2006. Other banks describe RBS as the most competitive in the sector, prepared to undercut other banks and offer cheaper loans and finance to the projects no other British bank will.
The intimate relationship that RBS has with the fossil fuel industry extends to new areas of expansion. As traditional oil extraction begins to peak, unconventional fossil fuels, such as oil sands or tarsands and coal bed methane, are becoming a reality. Previously inaccessible, this ‘dirty’ oil requires far more energy to convert into usable forms than traditional crude oil, resulting in much higher carbon emissions. RBS has called the development of oil sands an “energy-financing growth area”, and identified the need for “drilling dollars” for coal bed methane development.
We own RBS
Since we launched the Ditch Dirty Development campaign, we have been given a second reason to target RBS. When the financial crisis hit in 2008, RBS nearly went bust. The government bailed them out with billions of pounds of public money. This was followed by another bailout in November 2009 in which £39 billion of public money went into the banks. As a result we now own around 84% of RBS - the world’s largest bailed-out bank. We desperately need to cut our carbon emissions as a society. This means we need to fund the transition to a low carbon economy. The fact that we own one of the largest banks in the world gives us a unique opportunity to deliver this funding, and an even greater obligation to prevent the most destructive projects being financed with public money.
What we want
People & Planet are calling on RBS to:
- calculate and publish the embedded emissions resulting from loans to oil and gas companies and projects
- cap embedded emissions and set annual targets for reductions
- commit to a complete transition from fossil fuel to renewable energy lending
- establish ‘no-go’ areas for lending: immediately halt loans to unconventional fossil fuels (eg coal and tar sands) and which affect sensitive ecosystems such as rainforests.
RBS and their bosses at the Treasury have a choice. They can continue to push open the carbon frontier, locking in emissions for years to come. Alternatively, they could choose to take their climate impact seriously and commit to switching financing to renewable energy projects.
Embedded Emissions Embedded emissions are the emissions that will result from oil or gas produced or brought to the market from financed operations. RBS’s embedded emissions are calculated on the basis of the proportion of the financing they have provided for specific projects.
Oil Sands Oil Sands or Tar Sands are a specific type of oil which are very difficult to extract. They are a mixture of sand or clay, water and extremely heavy crude. Oil sands have lost the lighter elements of crude oil making it a much more viscous form of oil. This requires it to be processed at much greater temperature to turn into a usable form of oil.
Coalbed Methane Coalbed methane is a form of natural gas which is stored in coal by absoption into the pores also called the matrix. The gas must be extracted by drilling pipes into the coalbed and separating the gas from the water. This is a much more difficult process than natural gas extraction and generally the yield is lower, thereby making it significantly less efficient.
Kevin Smith from our campaign partner PLATFORM explains why RBS needs to clean up its act
More info can be found on the oyal bank of scotland website.
Or you can download PLATFORM’s report on The Royal Bank of Scotland.