Blaming banks for client pollution 'preposterous'

Published on Wednesday 11 July 2007 12:13

SIR TOM McKILLOP, chairman of Royal Bank of Scotland, has described as "preposterous" claims that banks should be held responsible for the "carbon footprint" of firms they lend to.

His biting response came as the Edinburgh-headquartered bank highlighted its role in financing the renewable energies sector in its latest Corporate Social Responsibility report.

Over the last year, RBS has pumped 1.3 billion into sustainable energy projects, including wind farms - a sum roughly equivalent to the funding it supplied to the traditional energy sector.

Other major global banks such as Citigroup, Bank of America and HSBC have also recently been highlighting their commitment to green energy - but RBS is claiming the lead in financing such projects.

RBS has been on the receiving end of attacks that say the bank's lending to the oil and gas sector is leading to environmental damage.

London-based "social and ecological justice" campaigners Platform issued a recent report claiming RBS's lending to the carbon-based energy sector made it "responsible" for more greenhouse gas pollution than the whole of Scotland combined.

It claimed that the bank was responsible for around 37 million tonnes of carbon emissions in 2005, upwards of a 100 times more than the previous year.

In RBS' first response to the report, Sir Tom said it amounted to "bad science" and was "counter-productive".

In an interview, Sir Tom said: "Are we really saying that banks should take on the entire carbon footprint of the world? It's preposterous."

Sir Tom - the former chief executive of drugs giant AstraZeneca - underlined his bank's commitment to tackling climate change, acknowledging the threat posed by greenhouse gases was "real".

"I think it is real. The overwhelming consensus of scientists - of course they could be wrong, because there is always uncertainty in science - but the overwhelming consensus of academies around the world is that this is real and we should take action to minimise any impact."

According to Sir Tom, if the Platform report was to be taken at face value then the implication could assume ridiculous pro- portions.

He said it could then be claimed that banks would be responsible for the carbon footprint of all the cars and homes that they had lent money to finance the purchase or building of.

"It is just completely flawed," Sir Tom said.

Elsewhere in its report, RBS - which is currently battling to pull off the world's biggest banking takeover with its 48bn for Dutch bank ABN Amro - said it lent a record 677m last year to small businesses and social enterprise projects.