Scottish Bank Stops Funding Coal, Oil Sands Projects

The Royal Bank of Scotland said that it would no longer provide project-specific funding for new coal-fired power stations, thermal coal mines, oil sands projects, or Arctic oil projects, becoming the latest major bank to heed investor pressure to step up efforts to fight climate change. RBS will also stop lending money to mining companies that generate more than 40% of their revenues from coal, or to power firms generating more than 40% of their electricity from coal, Oil Price reported.

“If we are 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,” Kirsty Britz, RBS director of sustainable banking, said, as carried by the Financial Times.

The bank’s current total exposure to the oil and gas industry accounts for 0.5% of its lending exposures, the bank says. Last year, RBS did not directly finance any new coal mining or coal power projects. RBS’s announcement follows last month’s statement by another large British bank, HSBC, which said that it would stop providing financing for new coal-fired power plants, and would not provide financial services for new offshore oil and gas projects in the Arctic. BNP Paribas, France’s biggest listed bank, said in October 2017 that it would no longer do business with companies whose main business is exploration, production, trading, or marketing of oil and gas from shale or tar sands projects.

BNP Paribas also said that it would not finance any oil or gas exploration or production projects in the Arctic region.

Another France-based bank, Societe Generale, said in 2016 that it was stepping up support for renewable projects, and stopped financing coal-fueled power plants or related infrastructure anywhere in the world.