Legal action against RBS puts spotlight on C of E’s shareholding

Legal action against RBS puts spotlight on C of E’s shareholding

By staff writers
30 Jun 2009

Campaigners have today launched legal action following investment by the Royal Bank of Scotland in energy companies and projects linked to climate change and human rights violations, raising questions about why the Church of England is investing in the company.

Despite its green campaigning, the Church of England is one of the major shareholders in RBS. According to its latest annual report, it has an £8.4 million stake in the company .

Since RBS was bailed out in October 2008, it has contributed to loans worth an estimated £10 billion to coal, oil and gas companies. Coal is the biggest source of the global carbon emissions which contributes to dangerous climate change.

The legal action is being taken against the Treasury by The World Development Movement, PLATFORM and People & Planet.

The campaigners believe that by investing in RBS, the Treasury is in direct conflict with the government's legislation and policies to reduce carbon emissions and prevent dangerous climate change.

The move also raises questions about whether the Church’s stake in the company also conflicts with its rhetoric about climate change.

Earlier this month, a senior bishop and a government minister spelled out the importance of the Church of England’s role in mobilising action on climate change, as its Shrinking the Footprint campaign unveiled energy saving toolkits for every parish in a bid to create the ‘20 per cent Church’ by 2050.

But the Church has come under criticism for not investing its £5 billion assets in a greener manner. At a time when others are investing in 'green' funds, the Church’s two biggest shareholdings, having a combined value of £200 million, are both in oil companies. It also invests heavily in a number of mining companies causing environmental devastation which has been highlighted by campaigners both inside and outside the Church.

During the last decade, the Church's other major investment decisions have involved pulling out of social housing in favour of several large out-of- town retail parks. Green campaigners have suggested that these encourage people to make longer car journeys, thus increasing carbon emissions.

Julian Oram, from the World Development Movement said: "The government has spent billions on a bank with a track record of financing energy companies' dirty and destructive projects. We're launching this action because the Treasury has displayed a blatant disregard to the government's own commitments to tackling climate change and its rules for spending public money. The taxpayers' interests would be vastly better served by RBS investing in a low carbon future than in undemocratic regimes and environmentally devastating projects around the world."

Kevin Smith, from PLATFORM said: "The government can't pretend to be a global leader on dealing with climate change while at the same time refusing to rein in a public body that is financing new coal, oil and gas projects all over the world."

Ian Leggett, from People & Planet said: "The government now controls RBS and has an exceptional opportunity to drive investments in low carbon jobs and infrastructure - not to repeat the recklessness of the past. If we are to stand a chance of stopping catastrophic climate change, the first priority is to make a clear and irreversible commitment to stop investing in high carbon companies and projects but to prioritise investments in renewable energies."

Rosa Curling, a solicitor from Leigh Day said: "The government has the power and control to ensure public money provided to UK banks is not invested in or lent to projects that harm the climate or individual human rights. The refusal by the Treasury to even consider whether an investment could contribute to climate change or result in human rights abuses is clearly unlawful and completely out of line with the government's own guidance, policies and targets on these issues."

Since its bail out, RBS has taken part in an estimated £10 billion in loans to coal, oil and gas companies including:

• £6 billion to the controversial energy giant E.ON, which is aiming to build the first new coal power station in the UK for over 20 years.

• In January 2009, RBS helped raise £400 million for the Irish company Tullow Oil and in March 2009, RBS was part of a consortium of 14 banks that lent £1.4 billion to the company. Tullow Oil is involved in the exploration and extraction of oil on the border between Uganda and the Democratic Republic of Congo (DRC). This area has seen some of the fiercest fighting in an extractive resource-driven civil war as rival armies and militias have struggled for control of the land, leading to thousands of civilian deaths and refugees.

• £116 million for Cairn Energy, a Scottish oil company, to be used for 'accelerated drilling' in arctic Greenland.

RBS has previously promoted itself as "the oil and gas bank", financing fossil fuel projects and companies around the world. Between May 2006 and April 2008, RBS took part in loans to the coal industry worth nearly $100 billion.

The campaigners believe that the evidence submitted to the High Court today provides convincing grounds to order the government to ensure that taxpayers' money in RBS supports investments in the wider public interest, by promoting a low carbon, sustainable and ethical future.

Read Ekklesia's report on the C of E's investments "Where is the Church of England's Heart Invested?" here

Creative Commons LicenseThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.0 England & Wales License. Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.