The Royal Bank of Scotland (RBS) said on Tuesday that it would no longer provide project-specific funding for new coal-fired power stations, thermal coal mines, oil sands projects, or Arctic oil projects, becoming the latest major bank to heed investor pressure to step up efforts to fight climate change.
RBS will also stop lending money to mining companies that generate more than 40 percent of their revenues from coal, or to power firms generating more than 40 percent of their electricity from coal.
"If we're going to support our customers in the long run, then it means addressing the challenge of climate change and the risks and opportunities it presents. We want to help build a cleaner, more sustainable economy for the future, and these policy changes form part of our broader approach to this major issue," Kirsty Britz, RBS director of sustainable banking, said, as carried by the Financial Times.
RBS's current total exposure to the oil and gas industry accounts for 0.5 percent of its lending exposures, the bank says. Last year, RBS did not directly finance any new coal mining or coal power projects.
RBS's announcement follows last month's statement by another large British bank, HSBC, which said that it would stop providing financing for new coal-fired power plants, and would not provide financial services for new offshore oil and gas projects in the Arctic, and for new greenfield oil sands projects.
BNP Paribas, France's biggest listed bank, said in October 2017 that it would no longer do business with companies whose main business is exploration, production, trading, or marketing of oil and gas from shale or tar sands projects. BNP Paribas also said that it wouldn't finance any oil or gas exploration or production projects in the Arctic region.
Related: Canada To Buy Kinder Morgan's Trans Mountain Expansion Project
Another France-based bank, Societe Generale, said in 2016 that it was stepping up support for renewable projects, and stopped financing coal-fueled power plants or related infrastructure anywhere in the world.
In one of the strongest signals yet that financing for fossil fuels is increasingly under review among the banking industry, the World Bank said in December 2017 that it would stop financing upstream oil and gas projects after 2019 as part of its support to countries to meet their Paris Climate Agreement targets.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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