A recent report from PLATFORM uncovers the climate impacts of the Royal Bank of Scotland’s identity as “The Oil & Gas Bank” – This feature article was first published in Platform’s Carbon Web Newsletter, Issue 7.
The report ‘The Oil & Gas Bank – RBS & the Financing of Climate Change’ investigates RBS-NatWest’s role in fuelling climate change, forcing open new carbon frontiers, and exacerbating conflict. Working closely with oil corporations, RBS provides the cash to build and operate drilling rigs, pipelines and oil tankers from West Africa to the Caribbean, from the Caucasus to the Middle East.
At first glance, a bank’s impacts on the climate appear minor: carbon emissions from computer screens and business trips. Yet RBS’ core products – loans – play a central role in the exploration, extraction and shipping of oil and gas. While emissions from banks’ internal energy use are comparatively low, the emissions embedded within RBS’ financial products are staggering, and rising rapidly.
In 2005, RBS project loans to oil and gas released 36.9 million tonnes of CO2. By 2006, emissions had passed 43.7 million tonnes – greater than those of Scotland. If CO2 molecules had corporate tags, the atmosphere would be full of RBS logos alongside BP, Shell and Exxon. The projects financed will continue pumping for 20-30 years after deals are struck – RBS’ drive to squeeze profit from fossil fuels locks huge emissions into our future.
While claiming credit for financing renewables, loans to this sector remain minor compared to the bank’s involvement in oil and gas. Wind farms have become an additional rather than alternative field of interest. Further, RBS has been pumping finance into previously inaccessible fossil fuels including coal bed methane and tar sands.
Jim McBridge from RBS Houston stated recently “We believe there’s going to be as much as $40 billion spent on oil-sands development in Canada, so this is another energy-financing growth area for us.” Strip-mining for tar sands threatens to decimate Canada’s forests and wetlands, both major carbon storehouses.
No bank has fully addressed its climate responsibilities. Yet while competitors are beginning to recognise that they cannot speak about shifting to a low carbon economy while their investments accelerate climate change, RBS is burying its head in the sand.
The RBS Oil & Gas Team
RBS’ oil and gas activities are headquartered in the City of London at 135 Bishopsgate, towering over Liverpool Street Station. Steve Mills leads the Oil and Gas Team in sourcing the cash for controversial projects and striking deals with the world’s largest and smallest oil companies. On any weekday, Steve could be assessing the risks and reasonable returns for an Exxon oilfield development off Nigeria, while beneath his window pedestrians head for lunch at nearby Brick Lane. His deputy Colin Bousfield may be submitting an aggressive bid to finance a borrowing base agreement with the Angolan state oil company. Advice specialist Michael Crosland may have started early, advising on the loan agreement that will make the enormous Qatargas 4 gas project a reality as commuters poured out of Liverpool Street Station. While tourists board the Central Line, heading for the West End, Steve checks upcoming deals with the Houston and Aberdeen offices.