A year ago, the British public became the majority shareholder in the Royal Bank of Scotland and to make this inauspicious anniversary, this weekend 40 leading figures including environmental and anti poverty campaigners, faith groups, trade unions, academia, MPs and the author Iain Banks have written to Alistair Darling to call on him to transform RBS into a Royal Bank of Sustainability.

The group have asked the Treasury to ensure that it and other publicly-backed banks help pay for Britain’s transition from a high-carbon economy with rising unemployment to a low carbon-society that provides millions of green jobs and better public services.

In the strongly worded letter, the group accused the Treasury of failing to stop taxpayers’ money being used by RBS to finance climate change and human rights abuses that spans the globe from Wales to India to the Democratic Republic of Congo.

The World Development Movement, People & Planet and PLATFORM have commissioned a report that sets out the business case for transforming the bank into the Royal Bank of Sustainability. The report argues that UKFI, the company set up to manage the government’s shares in the bailed-out banks, should take an ‘active ownership’ approach to its investments with respect to environmental and social issues. This is consistent with best practice and legislation which has been developed over a number of years by institutional investors and the government.

The campaigners’ evidence includes the following examples of RBS investments:

* Bangladesh – open cast coal mine

RBS subsidiary, ABN Amro Bank NV has a 4.75% share of GCM Resources, the UK company pushing for an open cast mine in Bangladesh. There has been fervent local opposition as it would displace approximately 40, 000 people and impact on access to clean water for approximately 100, 000 people

* Wales – open cast coal mine

RBS has taken part in loaning £115m to Hargreaves Services, the coal operator. Hargreaves has plans to extract 7m tonnes of coal by developing one of the largest opencast coal mines in the country at Tower Colliery, near the coal-mine-cum-protest-site Ffos-y-fran in Merthyr Tydfil, south Wales. This type of mining has been likened to a financial hit-and-run, bringing a few jobs for a couple of years and potentially leaving widespread asthma and other public health and environmental effects in the community for years to come.

* India – Vedanta mining

RBS was the lead financial adviser to Sterlite, which is 60% owned by Vedanta, in a recent takeover bid. The bank and its ABN Amro subsidiary gave letters of credit worth $100m (£60m) to Sterlite, which is India’s biggest copper producer.[i] Vedanta is very controversial and has an appalling record on human rights.

* Canada – tar sands

Research from the Rainforest Action Network indicates that since Oct. 13, 2008 – when HM Treasury announced its recapitalisation of the Royal Bank of Scotland Group – RBS has extended at least $2.7 billion in debt/equity issuance underwritings to companies that own and/or are actively building tar sands extraction infrastructure and/or tar sands oil pipelines in Alberta, Canada.

* Uganda/ Democratic Republic of Congo – oil exploration

In March 2009, RBS was part of a consortium of 14 banks that lent $1,890 million to the Irish company Tullow Oil – providing in the region of $100 million itself. The bank had already helped raise £402 million by placing shares for Tullow in January 2009. In early 2009, the company announced a major discovery of 400-1000 million barrels by Lake Albert in Uganda, just on the border with the Democratic Republic of Congo (DRC). Tullow also holds oil exploration rights across the border in North Kivu in the DRC, which continues to be torn by strife after more than a decade of resource-driven civil war. The border area has seen some of the fiercest fighting take place as rival armies and militias have struggled for control. An additional 30,000 refugees were displaced in North Kivu during two weeks of fighting in March, adding to the existing 1.4 million internally displaced people in the region.

Julian Oram, head of policy at the World Development Movement said:

“This catalogue of harmful bank investments paid for by the UK taxpayer puts the government to shame. Public money pumped into RBS and other bailed-out banks over the last year is paying for some of the most damaging mining and fossil fuel projects around the world. These projects will have untold consequences for some of the world’s poorest people, while failing to deliver any long-term benefit to the British taxpayer.”

Ian Leggett, director of People & Planet said:

“RBS could be a global leader in low carbon financing. But to build that business two things need to happen. First, social and environmental criteria have to be a key part of RBS’s investment decisions. Second, RBS needs to stop funding unconventional and controversial fossil projects immediately.”

Kevin Smith, climate and finance campaigner at PLATORM said:

“The UK government claims to a ‘world leader’ on climate change, but it is allowing public money to be used to finance companies that are carrying out climate-trashing projects around the world. We should be using RBS as a public institution to finance renewables infrastructure and green jobs rather than bankrolling coal, oil and gas all over the world.”

Duncan McLaren, chief executive of Friends of the Earth Scotland said:

“The business case for weaning RBS off its ‘dirty habits’ is strong and sound. By funding climate wrecking projects such as coal mines it is storing up economic woes for the future. But by acting as responsible owners UKFI can begin turning the bank into a powerhouse for renewables and decarbonisation. This would be great for Scotland’s economy, as well as for the climate.”