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RBS under siege over “environmental vandalism”

August 20th, 2010

The Camp for Climate Action, which was set up on parkland behind the Royal Bank of Scotland’s world headquarters at Gogarburn in Edinburgh on Wednesday night, is deploying spectacular tactics to make what in my view is a valid point.

The campers, including my nephew, wrongfooted the police and RBS security by arriving a day earlier than expected. So far the campers’ protest against the bank’s continuing support for environmentally-destructive industries, including Canadian tar sands projects (pictured above), is proceeding peacefully and well.

In a Herald article published today, climate camp spokeswoman Ruth McTernan explained what the campers are about:

“It’s been a dramatic start to what will be a week full of workshops, sustainable living and direct action against RBS’s crimes against the climate. We’re in a beautiful location here at Gogarburn. People should come down, have a cup of tea and check out what’s going on for themselves.”

I’ll soon be doing just that to assess the mood, and am looking forward to seeing how Monday’s “day of mass action” — in which the climate campers will try to shut down RBS’s Gogarburn world headquarters — goes.

There are people in Edinburgh and elsewhere who resent the climate camp, dismissing the protesters as a bunch of misdirected middle-class students and wastrels with too much time on their hands, or accusing them of being hypocritical since they too are consuming fossil fuels, burning propane gas, using mobile-phones and laptops etc.

There also seems to be a degree of resentment about the cost of the police presence around the camp. Read the comments on this recent Camp for Climate Action blog post to get a flavour. However much of this sniping and knitpicking misses the bigger picture.

I admire the climate campers for having the balls to challenge the (almost certainly unsustainable) economic and environmental status quo – and believe they have probably picked a good target in RBS. As well as becoming one of the world’s biggest purveyor of subprime-infected timebombs (CDOs etc) under former chief executive Sir Fred Goodwin, the bank also became the world’s leading funders of fossil fuels and carbon-intensive industries including Albertan tar sands. If nothing else the campers are doing alot to raise awareness of such issues, even inside the bank itself.

A 2009 report titled Royal Bank of Sustainability written by Nick Silver, a senior honorary visiting fellow at Cass Business School and  fellow of the Institute of Economic Affairs, concluded by saying:-

“There is a clear case for UK Financial Investments to engage actively with the board and management of RBS to ensure effective consideration and analysis of environmental, social and corporate governance issues. UKFI should pursue higher standards than industry good practice because it is representing the wider interests of taxpayers, and defending the credibility of government policy and its own UK Low Carbon Transition Plan.”

A more recent report titled A Bank for the Future: Maximising public investment in a low carbon economy, written by former PWC consultant James Leaton and tax economist Howard Reed, also called for a radical rethink of government policy in this area.

“The UK can’t afford another meltdown, yet short-term, high risk, carbon-intensive investments are still business as usual for the banks. The government must reform RBS into a Green Investment Bank (GIB) and provide a low carbon policy framework to create a sustainable economy.”

I have consistently believed that, after taking control of 83% RBS’s equity in October 2008, the UK government had a once-in-a-lifetime opportunity to “tame” RBS and indeed other banks, and force through radical behavioural and structural changes to make them more sustainable. But Gordon Brown’s government did nothing of the sort.

Instead it created UKFI, a quasi-commercial buffer between the Treasury and the bank which would be comical if it wasn’t so downright tragic. As I’ve said in earlier blog posts, UKFI is the most absentee of “absentee landlords”. Basically, it has absolutely no interest in policing or refocusing what RBS does. Instead all UKFI seems to be interested in is:
(1) Short-term profits growth
(2) Short-term share price performance and
(3) The swift reprivatization of RBS.

As long as the bank can achieve these goals, UKFI doesn’t seem to give a damn how they are achieved. Astonishingly, UKFI, and by extension the UK government, is pursuing the same flawed and unsustainble thinking that led to the global financial crisis in the first place!

I suspect the bank’s recent claim that it is a “strong supporter” of renewables projects is “greenwash”. Of the $15 billion raised for the energy sector by RBS, through underwriting of debt and equity, since its October 2008 bailout, only $83m has gone into renewable energy projects – that’s less than one per cent. See this blog from the San Fransisco-based environmental charity, Rainforest Action Network, for more.

NOTE (added 8.30am on Monday August 23rd). While I don’t fully subscribe to the climate campers’ “dark green” views, I support their right to express them and protest as spectacularly as they choose (Brendan O’Neill made a similar point in Spiked in 2007). However, I do not condone mindless vandalism or any violence.

  • To read my recent report on the warped priorities and environmental naivete of RBS’s effective parent group, UK Financial Investments (UKFI), led by chief executive Robin Budenberg, click here

Short URL: http://www.ianfraser.org/?p=1598

Posted by on Aug 20 2010. Filed under Blog. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

3 Comments for “RBS under siege over “environmental vandalism””

  1. Note that my blog post to which you link documents funds *raised* by RBS through underwriting of debt and equity, not funding *provided* by the bank in the form of loans. Of course the lending picture is simmilar, and addressed in my post yesterday: http://understory.ran.org/2010/08/24/decoding-rbs-greenwash/

  2. Noted. Thanks Branto. Will amend text accordingly

  3. Today’s New York Times has an excellent article on its front page. The article reveals that several leading banks including Wells Fargo, Credit Suisse, Morgan Stanley, JPMorgan Chase, Bank of America, Citibank and HSBC are backing away from funding projects that cause environmental degradation. The article by Tom Zeller Jr said:-

    Banking analysts and others suggest that heated debate over climate change, water quality and other environmental considerations is forcing lenders to take a much harder — and often uncomfortable — look at where they extend credit, and to whom.

    I sincerely hope that Stephen Hester, RBS’s “old school investment banker” CEO reads this.

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