RBS: Critical Carbon Footprint Report ‘Deeply, Deeply Flawed’

July 11, 2007

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Royal Bank of Scotland’s chairman, Sir Tom McKillop, claimed this week that an attempt by environmental activists to hold it responsible for the carbon emissions of oil and gas projects which it finances was “deeply, deeply flawed,” The Herald reports.

London-based Platform claimed in a recent report backed by Friends of the Earth Scotland that Royal was responsible for carbon emissions greater than those of all of Scotland. In 2005, the report claimed the bank was responsible for about 37 million tonnes of carbon emissions, more than one hundred times the level the bank had reported for that year.

McKillop said the report implied “banks should be responsible for the carbon footprints of everyone they lend to.”

He added: “That would mean banks would be responsible pretty much for the carbon emissions of the world.”

“It is just completely flawed,” he claimed, saying that the argument could be extended to take in the impact of households’ carbon emissions if Royal provided a mortgage, or the environmental impact of cars if it had provided a car loan.

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Reader Comments

Perhaps McKillop’s view and the London Based Platform could both improve their approach. Is it reasonable for a “conscious bank” to do due dilligence into the carbon impact of potential investments? “Conscious lending” protects the planet, and improves the reputation of the bank.

Zephyr Bloch-Jorgensen | July 12th, 2007

Tom McKillop either hasn’t read our report or is purposefully distorting it.

It’s publicly accepted that banks bear some moral responsibility for projects they finance. That’s why its not OK to give loans to illegal drugs or cluster bombs.

Our calculations are based on the idea that RBS is responsible for emissions corresponding to the proportion to the project it financed. Not for the entire project or company’s emissions, despite McKillop’s distortion.
Common sense to the world, deeply flawed to RBS’ Chair. Somebody’s sticking his head in the ground.

Mika Minio | July 13th, 2007

RBS is not the only bank to be under pressure about how it uses the money its customers deposit with it. Earlier this summer, Dutch banking behemoths ABN Amro won the FT Sustainable Bank of the Year Award, as it simultaneously came bottom of a Dutch Friends of the Earth list of environmentally damaging banks.

When big business, like M&S, is increasingly embracing the ethical pound, the high-street banks are once again in danger of lagging behind their commercial contemporaries. And they can ill-afford to. Large and small companies alike, including sustainable banks like Triodos, have proved that environmental considerations can make for good business. Providing much more transparency about how they are investing their money (we send our depositors a list of all the organisations we lend to) will only be a good thing for customers who are increasingly reluctant to accept anything less.

James Niven | August 1st, 2007

Tom McKillop’s response suggests that banks should lend to anything or anyone, regardless of any ethical concerns. The drugs trade? Pimps? Both these industries could bring healthy profits!

All the money RBS invests in new unconventional fossil fuels is money diverted from funding the only real, sustainable replacement for oil – renewables. By keeping us addicted to oil and delaying the inevitable switch to renewables RBS is harming us all and should be held accountable for that.

Timothy Halpin | September 24th, 2008