RBS: The ‘Oil Bank of Scotland’

It’s easy to see why a student may choose a NatWest account; great free overdraft, five year railcard, and this year they’re even throwing in a webcam so us hip youngsters can “web log” on “Youtube” and be as cool as David Cameron. There’s even a “Go Green” section on their website, so we can “See how we can help you to protect the environment”, and with advice such as “don’t order a cheque-book unless you really need one”, it’s hard to see what chance global warming has got against this corporate sponsored Green counter-attack.

However, as usual, all is not quite as it seems. NatWest is the student-friendly arm of The Royal Bank of Scotland, who brand themselves as “The Oil and Gas Bank” because they specialise in arranging loans for oil and gas extraction and exploration projects. RBS has made itself integral to every stage of oil and gas exploration, production and development, from financing oil and gas companies to explore new regions, to arranging loans for pipelines. Whilst BP, Exxon and Shell are the visible logos of fossil fuel production, they are financed by RBS, who between 2001 and 2006 provided over $10 billion in oil and gas loans and acted as financial adviser on over $30 billion of projects. In 2006 The Royal Bank of Scotland’s embedded emissions (taking into account their part in fossil fuel projects) overtook the emissions for the whole of Scotland, at over 40,000,000 tonnes of CO2.

If you go onto the RBS website, there is a whole section on Corporate Responsibility which includes a page on ‘The Environment’. Here you can learn how all RBS branches are supplied with one hundred percent green electricity, donate their old office furniture to ‘Recycle Scotland’, and have even made the switch to recycled office paper. Whilst these are undoubtedly bold steps in the right direction, it does seem to be missing the elephant in the room when it comes to environmental impact, and this becomes even more obvious when you notice that the website is still advertising its ‘Plans for 2007’.

I am perhaps being overly critical. RBS is in fact a big lender to renewable energy projects, and in 2005 (the most recent figures I can find) arranged $136 million of loans to two renewable projects. However this is dwarfed by their investment in non-renewable energy, and their efforts for future deals are still aimed towards oil. As we are fast approaching (or even passing) Peak Oil, we have a choice: either we can further invest in increasingly dirty and unyielding oil beds, not only sentencing the planet to climate chaos, but also locking ourselves into further years of dependence on oil (where more oil means more corruption and more wars), or we can use that money to invest in alternative energy, which is a growth sector in need of capital. Annual growth rates are around 25% for wind and 30% for solar energy. In recognition of this, other banks have begun to make the change. For a long time now The Co-operative Bank has had no exposure to oil, gas or coal (or indeed a whole host of other ethically-challenged investments), and HSBC recognises that its “most significant impact [on climate change] is the investment and lending decisions we

make. Therefore, we are looking at solutions to climate change through our investments and funding”. Whilst this is not to say that other banks are beyond criticism when it comes to policies, RBS is lagging far behind, and may even still be going in the wrong direction.

The most recently publicised example of the new, unconventional fossil fuel source to replace our dwindling oil supplies is that of the Canadian tar sands. The pros of these are that they are huge and not owned by Saudi Arabia, but the cons are far weightier. It takes about 29kg of CO2 to produce a conventional barrel of oil, but this rises to 125kg for tar sands oil, because it is a hugely energy intensive process to get crude oil out of the heavy mixture of bitumen, water, sand and clay found beneath more than 54,000 square miles of boreal forest in northern Alberta an area the size of England and Wales combined, which also happens to be one of the world’s largest natural carbon sinks. The price of a barrel of oil has made it economically viable to engage in open cast mining to exploit this resource, forever destroying one of the last remaining wildernesses on the planet, but surely the price of a barrel of oil also means it is madness to continue down the road of dependence on decreasing oil reserves. RBS are part-financing BP’s venture into Canada, and it is by the destruction of this wilderness that NatWest pays for our railcards and webcams.

As the Stern Review so eloquently puts it, “the investment that takes place in the next ten to twenty years could lock in very high greenhouse gas emissions for the next half-century, or help move the world onto a more sustainable path”. Although Stern was referring the corporate investment, the principle applies to personal investments too, and by banking with NatWest we are investing in what has been dubbed ‘The Oil Bank of Scotland’. Last year our Student’s Union joined the National Union of Students in calling on RBS to conduct and publish a full calculation of their embedded carbon emissions, and informing them that we shall consider “other, more ethical banking options”, should RBS not substantially cut their commitment to investing in fossil fuel extraction programmes. At least by following this lead we might be able to show NatWest that there are things students care more about than free webcams, and that we’re not stupid enough to believe that by giving us the option of opting out of paper statements they’re somehow going green.

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