Recent figures show that the Royal Bank of Scotland (RBS) has reduced its global lending to oil and gas companies and doubled its green energy loans in the UK to £1bn a year.
The RBS figures show its global exposure to oil and gas in 2015 fell 70% compared with 2014, down from £22bn to £6.6bn. The exposure to mining and metals, which includes coal, also fell, from £4.7bn to £2.1bn. The bank also ended its lending to mining companies whose sole focus is coal in December.
The reduction ensues from a steep slump in the oil and coal sectors in 2015, and declining investment by most financial institutions; the true test of the bank’s green lending credentials would surface if those markets recovered.
Although RBS says it is guided by environmental risks and would no longer finance any new tar sands projects, there are speculations on the bank’s recent change of direction resulting from its previous significant funding of heavily polluting tar sands projects in Canada.
Financial institutions are shifting away from fossil fuel investments as the Bank of England, the World Bank and others warn that action to cut carbon emissions could leave coal, oil and gas assets stranded.