RBS cuts lending to new coal and Arctic oil projects

by Press Association, The Guardian

Royal Bank of Scotland will no longer fund Arctic oil projects and has pledged to cut lending to firms profiting largely from coal as part of an updated energy policy.

The changes cover the mining, power and oil and gas sectors and are aimed at taking a tougher line on climate change. They mean the bank will not provide “project-specific finance” to new coal-fired power stations, new thermal coal mines, oil sands or Arctic oil projects, or those involved in “unsustainable” vegetation or peatland clearing.

RBS will also tighten restrictions on general lending to mining firms that source more than 40% of their revenues from thermal coal, and power companies that generate over 40% of their electricity from coal.

The former threshold was 65%.

RBS will hold its AGM in Edinburgh on Wednesday when executives are expected to face a barrage of questions from shareholders over dividends, branch closures and reprivatisation of the government’s 70.5% stake.

Its efforts have been commended by the responsible investment group ShareAction, which has been pushing a number of firms to ramp up their environmental sustainability policies.

ShareAction’s project manager, Sonia Hierzig, said: “The strengthened energy financing policies of RBS implement many of ShareAction’s recommendations for more robust management of climate-related risks.

“They also make RBS the bank with the strongest energy sector policies out of the top five UK banks.”

She added that it was an “encouraging step forward in a relatively short space of time, and will hopefully inspire other banks to achieve similar progress”.

Members of ShareAction hit out at HSBC at its AGM in April, saying they were disappointed that the lender’s energy policy made targeted exceptions for new coal-powered plants in Bangladesh, Indonesia and Vietnam for five more years.

However, it was commended by environmental groups, including Greenpeace, for its broader plans to phase out lending to new coal-fired power plants in “high-income countries” and reduce commitments to oil sands “over time”.

RBS’s new lending restrictions may spare it from the kind of protests that disrupted the Barclays AGM earlier this month, as climate change activists called on the bank to stop financing firms involved in fossil fuels.

Seven students from People & Planet stormed the stage where Barclays executives were seated, and were forcibly removed by security.

Barclays’ chairman, John McFarlane, said it was in the process of preparing a formal review of the fossil fuel sector which it hopes to publish later this year.

RBS’ director of sustainable banking, Kirsty Britz, said: “If we’re going to support our customers in the long run, then it means addressing the challenge of climate change and the risks and opportunities it presents.

“We want to help build a cleaner, more sustainable economy for the future, and these policy changes form part of our broader approach to this major issue.”

source: https://www.theguardian.com/business/2018/may/29/rbs-cuts-lending-to-new-coal-and-arctic-oil-projects

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