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RBS needs to run, not walk, to become an ethical banking leader



After the Royal Bank of Scotland (RBS) released its Sustainability Review last week, Scotland’s Herald newspaper reported that the state-owned bank “aims to lead from the front on ethical banking” – although it admitted that it could take up to five years to get there.

This is quite an ambition for any bank, and especially for one whose financing for Canadian tar sands led to the bank being singled out for occupation by Climate Camp activists in 2010; whose financed emissions (i.e. the emissions supported by the bank’s lending) were recently estimated by World Development Movement to be up to 1.6 times the emissions of the whole of the UK; and which was shown by recent research to be the UK’s biggest financier of the coal mining industry.

Whether you take this as a genuine aim or a piece of spin, it’s a massive shift in rhetoric from 2006, when RBS actively advertised itself as “The Oil & Gas Bank”. Maybe we will see this ambition will go the same way as David Cameron’s promise to lead the “greenest government ever”, but let us suspend our disbelief for a moment and choose to take the bank at its word on this.

It must be pointed out that RBS has taken some positive steps in recent months. It has stated that it no longer provides project finance for tar sands projects (although this is not yet policy, and RBS still provides general finance for companies involved in tar sands extraction). It has stated in its new report that it will not provide “direct financing to specific oil exploration projects” in the Arctic or Antarctic (although that’s a lot of caveats to fit into six words). And it has committed not to finance companies with significant mountain-top coal mining operations in the American Appalachia mountains (which is good in that it does cover general corporate finance and not just project finance, but odd in that it implies the company is unconcerned about the destruction of mountains outside of Appalachia).

If imperfect, these policies do represent small steps in the right direction. But to truly lead from the front as an ethical bank in the next five years, RBS will need to run rather than walk. There are plenty of steps which could be taken quickly which would represent real progress. Firstly, RBS could become the first commercial bank to follow the swathe of multinational development banks and governments which published policies in 2013 not to finance coal power stations globally, except in “rare and exceptional” circumstances – or better, go one step further and say no to coal entirely.

Instead, the bank’s policy on coal-fired power stations, while better than nothing, is among the lowest standards around. The bank even operates an Indonesian branch which drives 42% of its lending towards the ‘mining and quarrying’ sector, contributing heavily to the financing of a devastating coal mining boom there, at the expense of the country’s rainforests and indigenous people.

While stepping away from coal would be a good start, more would need to be done. The Intergovernmental Panel on Climate Change (IPCC), with its recent fifth assessment report, has made clear that the world needs to move rapidly away from fossil fuels, and has set out the timescales and the costs. The world is waiting for a big commercial bank willing to commit to reducing its exposure to fossil fuels in line with what the science dictates. This is a relatively simple matter of disclosing loans, investments and underwriting for fossil fuels and their associated emissions, setting targets for a rapid reduction of these emissions, and following through with implementation.

To do so would free up capital to invest in the burgeoning renewables and energy efficiency sectors, avoid the considerable risks of stranded assets which comes from financing dirty coal, and surely contribute to turning the bank’s reputation around.

There is a wide open space for a large commercial bank to become a leader on ethics and the environment, and as a majority publicly-owned bank with a mountain to climb in terms of rebuilding its reputation, RBS has plenty of reasons to move into it. But this would need a serious departure from ‘business as usual’. Let’s hope we don’t find ourselves, five years down the line, looking back on this talk of ethical leadership as just another broken promise.

Ryan Brightwell is a researcher with BankTrack and founder of the research consultancy Bright Analysis.

Photo: John Nyberg via freeimages

Further reading:

RBS takes top spot in renewable lending and sets out sustainability plans

Citi, Morgan Stanley and Bank of America top funders of coal, says report

Climate Week: customers urged to ditch fossil fuel funding banks

RBS reports losses of £8.2bn – and employee bonuses of £576m

The Guide to Sustainable Banking 2013


New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
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New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.


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How Going Green Can Save A Company Money



going green can save company money
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What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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