The UK’s biggest contributor to climate change is the banking industry. And top of the list within the sector is the taxpayers’ very own, Royal Bank of Scotland.
Here’s a puzzler: what is the UK’s biggest contributor to climate change? Did you answer coal? Good guess, but no. Transport? It’s a biggy for sure, but not the largest. Farming? A distant fourth.
Give up? OK, Britain’s number one contributor is … the banking industry! And top of the list within the sector is the taxpayers’ very own, and much unloved, Royal Bank of Scotland.
If this sounds improbable, consider this snippet from actuary consultant Nick Silver:
“Embedded emissions from project finance attributable to RBS was 44 M tonnes of CO2 in 2006, greater than Scotland’s national emissions. However, most of these projects were in collaboration with other lenders and the total annual emissions from these projects was 825 M tonnes of CO2, significantly more than the UK’s total direct emissions and 3% of global emissions.
“So, through its ownership of RBS, the government potentially has a larger influence on global carbon emissions than it does through all domestic activities.”
I had to re-read this passage several times over, so staggering were its implications. Staggering due to the sheer scale of RBS’ contribution to climate change through its fossil fuel financing. But also staggering because, with a majority shareholding in RBS, the Treasury could feasibly use its leverage over the bank to shift away from dirty and destructive investments – such as the devastating tar sands scheme and oil speculation in the conflict-ravaged border between Uganda and the DRC – and towards projects in support of a low carbon economy. Simple, right?
Maybe not. The Treasury has actively refused to intervene in how public money is spent by RBS; arguing to do so would compromise the ability of the bank to run a commercially successful operation (because clearly it had done such an exemplary job of this before the bailout!).
The Government’s refusal to properly consider the issue led WDM, People & Planet and Platform to request a judicial review of the Treasury’s decision-making processes in June 2009. This case continues to rumble through the courts.
And then came a fresh decision by the Treasury in relation to the so-called ‘Asset Protection Scheme’ (APS), about which details only emerged in November.
The Treasury has basically argued that under the terms of the bail out, including the APS, it cannot interfere in RBS’ commercial operations. Yet under the APS, the Treasury has explicitly reserved itself the power to do just this, specifically in the context of that politically contentious hot-potato, bankers’ bonuses.
Enter judicial review claim number 2, filed today with the Treasury’s solicitors. Specifically, our allegation is that the Treasury has acted unlawfully by failing to undertake a proper assessment of RBS’ investment in projects and companies linked to climate change and human rights violations; and by failing to apply a consistent policy in insisting on control over the payment of RBS’ bonuses, but not over the social and environmental impacts of its lending.
The legal fight will continue, but the issue is too important to reside in the courts alone. There is a real need for public pressure on the government, and for Prospective Parliamentary Candidates in the forthcoming election to know this is an issue of concern to people up and down the country.
If you feel strongly about this please take a moment to do this simple online action to let the Chancellor know how you feel. If reason won’t sway him, maybe mass coercion in an election year will!
Our guest writer is Julian Oram, Head of Policy and Campaigns at the World Development Movement