Royal Bank of Sustainability?

At the end of 2008, UK taxpayers became majority owners of the Royal Bank of Scotland, one of Britain's largest banks. So, since we've paid for it, shouldn't we have some say in how it is run? Kevin Smith, from the campaigning organisation Platform, puts the case

February 23, 2010
4 min read

In the year since it was effectively taken into public ownership, the Royal Bank of Scotland (RBS) has used public money in ways that often look little different to its use of private money previously. On the environmental front, this has included extending at least $2.7 billion in loans to companies that own or are building infrastructure to extract tar sands oil in Canada – an endeavour that has been slammed for its devastating impact on climate change, local ecosystems and indigenous peoples. This is just one example of RBS’s post-recapitalisation finance of fossil fuels.

During the same period, the British Wind Energy Association publicly called for some form of targeted government intervention for the UK to achieve its renewable targets. I approached a number of green energy associations looking to speak to someone who had attempted to obtain finance from RBS for their projects, but I was told that no one would waste their time in such fruitless efforts.

The report that Platform and others commissioned at the end of last year, Towards a Royal Bank of Sustainability, is about attempting to democratise financial institutions. We as taxpayers have paid for it, so we should have some say in how the RBS is run. Financial institutions should exist to finance the needs of society rather than as a means of making large amounts of money for small numbers of people. The political opportunity to assert the public ownership of RBS comes at a time when there is an stark contrast between the social need for low-carbon and the ‘business as usual’ approach of fossil-fuel finance.

The ‘hands off’ approach of the Treasury is looking increasingly untenable. It’s not just left-wing economists and environmentalists that are challenging this position. Jeremy Scott, the global financial services chairman of PricewaterhouseCoopers, has said that ‘Governments need to accept, given the limited likelihood of a quick extraction from the sector, that their main focus needs to be on the positive role they can play given they are “inside the tent”.’

If we put aside for a moment the obsession with short-termist profit maximisation that characterises our economy, there is a clear business case for banks to divert the flow of capital away from new fossil fuels and into clean energy. The government-commissioned Stern Review on climate change clearly laid out that the longer we delay the changes we need to make to our societies and our economies, the higher the annual percentage of GDP we will end up paying to adapt to the consequences of the destabilised climate.

A number of groups are calling for some sort of state-managed green investment bank that would finance the multiple projects necessary for the transition to a low-carbon economy. Some argue that the change in institutional culture might be too great for a bank like RBS to be used to perform this function, and that new financial architecture will be necessary. Regardless of this, the fact remains that any new green infrastructure will need to be accompanied by the withdrawal of banks such as RBS from the fossil-fuel sector. An infinite number of windmills won’t help if they continue to extract and consume coal, oil and gas at the same rate.

The spectacular losses caused by reckless financial practices have been socialised. But the banks continue to insist that the profits remain privatised – and, importantly, the decisions as to how go about creating those profits remains firmly in the hands of the banking executives.

Yet the fact that RBS is majority owned by the public provides an enormous opportunity to demand a much-needed dose of public involvement in financial institutions that up until now have been entirely unaccountable and opaque to the wider public.

The UK taxpayer has paid and will keep paying an enormous price to have kept the banking sector afloat. Possibly the only silver lining to be found in this situation is the political potential to put the sustainability and human rights agenda at the heart of one of the biggest financial structures in the country.

Read Platform\’s report on the RBS

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.

Jeremy Corbyn is no longer the leader of the opposition – he has become the People’s Prime Minister
While Theresa May hides away, Corbyn stands with the people in our hours of need, writes Tom Walker

In the aftermath of this disaster, we must fight to restore respect and democracy for council tenants
Glyn Robbins says it's time to put residents, not private firms, back at the centre of decision-making over their housing

After Grenfell: ending the murderous war on our protections
Under cover of 'cutting red tape', the government has been slashing safety standards. It's time for it to stop, writes Christine Berry

Why the Grenfell Tower fire means everything must change
The fire was a man-made atrocity, says Faiza Shaheen – we must redesign our economic system so it can never happen again

Forcing MPs to take an oath of allegiance to the monarchy undermines democracy
As long as being an MP means pledging loyalty to an unelected head of state, our parliamentary system will remain undemocratic, writes Kate Flood

7 reasons why Labour can win the next election
From the rise of Grime for Corbyn to the reduced power of the tabloids, Will Murray looks at the reasons to be optimistic for Labour's chances next time

Red Pepper’s race section: open editorial meeting 25 June
On June 25th, the fourth of Red Pepper Race Section's Open Editorial Meetings will celebrate the launch of our new black writers' issue - Empire Will Eat Itself.

After two years of attacks on Corbyn supporters, where are the apologies?
In the aftermath of this spectacular election result, some issues in the Labour Party need addressing, argues Seema Chandwani

If Corbyn’s Labour wins, it will be Attlee v Churchill all over again
Jack Witek argues that a Labour victory is no longer unthinkable – and it would mean the biggest shake-up since 1945

On the life of Robin Murray, visionary economist
Hilary Wainwright pays tribute to the life and legacy of Robin Murray, one of the key figures of the New Left whose vision of a modern socialism lies at the heart of the Labour manifesto.

Letter from the US: Dear rest of the world, I’m just as confused as you are
Kate Harveston apologises for the rise of Trump, but promises to make it up to us somehow

The myth of ‘stability’ with Theresa May
Settit Beyene looks at the truth behind the prime minister's favourite soundbite

Civic strike paralyses Colombia’s principle pacific port
An alliance of community organisations are fighting ’to live with dignity’ in the face of military repression. Patrick Kane and Seb Ordoñez report.

Greece’s heavy load
While the UK left is divided over how to respond to Brexit, the people of Greece continue to groan under the burden of EU-backed austerity. Jane Shallice reports

On the narcissism of small differences
In an interview with the TNI's Nick Buxton, social scientist and activist Susan George reflects on the French Presidential Elections.

Why Corbyn’s ‘unpopularity’ is exaggerated: Polls show he’s more popular than most other parties’ leaders – and on the up
Headlines about Jeremy Corbyn’s poor approval ratings in polls don’t tell the whole story, writes Alex Nunns

Job vacancy: Red Pepper is looking for a political organiser
Closing date for applications: postponed, see below

The media wants to demoralise Corbyn’s supporters – don’t let them succeed
Michael Calderbank looks at the results of yesterday's local elections

In light of Dunkirk: What have we learned from the (lack of) response in Calais?
Amy Corcoran and Sam Walton ask who helps refugees when it matters – and who stands on the sidelines

Osborne’s first day at work – activists to pulp Evening Standards for renewable energy
This isn’t just a stunt. A new worker’s cooperative is set to employ people on a real living wage in a recycling scheme that is heavily trolling George Osborne. Jenny Nelson writes

Red Pepper’s race section: open editorial meeting 24 May
On May 24th, we’ll be holding the third of Red Pepper’s Race Section Open Editorial Meetings.

Our activism will be intersectional, or it will be bullshit…
Reflecting on a year in the environmental and anti-racist movements, Plane Stupid activist, Ali Tamlit, calls for a renewed focus on the dangers of power and privilege and the means to overcome them.

West Yorkshire calls for devolution of politics
When communities feel that power is exercised by a remote elite, anger and alienation will grow. But genuine regional democracy offers a positive alternative, argue the Same Skies Collective

How to resist the exploitation of digital gig workers
For the first time in history, we have a mass migration of labour without an actual migration of workers. Mark Graham and Alex Wood explore the consequences

The Digital Liberties cross-party campaign
Access to the internet should be considered as vital as access to power and water writes Sophia Drakopoulou

#AndABlackWomanAtThat – part III: a discussion of power and privilege
In the final article of a three-part series, Sheri Carr gives a few pointers on how to be a good ally

Event: Take Back Control Croydon
Ken Loach, Dawn Foster & Soweto Kinch to speak in Croydon at the first event of a UK-wide series organised by The World Transformed and local activists

Red Pepper’s race section: open editorial meeting 19 April
On April 19th, we’ll be holding the second of Red Pepper’s Race Section Open Editorial Meetings.

Changing our attitude to Climate Change
Paul Allen of the Centre for Alternative Technology spells out what we need to do to break through the inaction over climate change

Introducing Trump’s Inner Circle
Donald Trump’s key allies are as alarming as the man himself