Banks criticised for climate change finance

The Royal Bank of Scotland Group (RBS), HSBC and Barclays are investing billions in coal-fired power stations despite the threats of climate change, a report has found.1

Research by a coalition of environmental groups including Platform and Friends of the Earth Scotland found that, between May 2006 and April 2008, RBS invested almost $16 billion through 27 loans, HSBC just over $10 billion in 3 loans, and Barclays $5.8 billion in 17 loans to the coal industry. The report says all three participated in investing $70 billion in Eon in 2007, which has proposed a new coal-fired power station at Kingsnorth, Kent (ENDS Report 396, pp 26-29 ).

Growing demand for energy, higher gas prices and the need to replace old power stations are driving investment in coal. Power firms need large sums of capital to finance these projects. In the two-year research period, UK banks pumped $108 billion into companies involved in the coal sector worldwide.

The report criticises banks’ failure to report on their investments which means the data is only a "rough estimate". It calls on banks to make full disclosures and switch investment from carbon-intensive projects to cleaner technologies.

RBS said it aims to support customers operating within government policy "to ensure energy diversity and stability".

HSBC said there is a need to support traditional energy generation because it is "still too early" for low-carbon technologies to replace them.

Barclays said it ensures that the environmental risks of all its loans are "thoroughly assessed".

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