Royal Bank of Scotland (RBS)
The Royal Bank of Scotland Group (RBS) is an UK-centred bank with its headquarters in Edinburgh, Scotland, it serves 24 million personal, business and institutional customers across the globe.[i] At the end of 2015, RBS held USD13,9 billion in assets under management.[ii]
RBS’ 2014 Defence Sector Policy Summary states: “Financing of companies involved in the manufacture, sale, trade, broking, service or stockpiling of […] nuclear weapons or the bespoke components of such weapons” and the “trade of weaponry (e.g. bombs, missiles, rockets, guns, ammunition) and equipment designed to enable the transport, deployment, execution or performance of a weapon (e.g. aircraft carriers, weapon platforms)” are restricted. This means that companies engaged in these activities are not necessarily excluded but “undergo enhanced due diligence including review by a reputational risk forum or approver and annual evaluation.”[iii] In addition, RBS does not exclude entire companies but only restricts financing of certain activities related to nuclear weapons.[iv]
The policy covers RBS’ lending and investment banking operations. However, its asset management activities, including investments made on its own account, investments made on behalf of third parties, discretionary mandates, actively managed funds and passively managed funds are not covered by the policy.[v]
RBS screens its customers for compliance with the policy so it can terminate all services for which it has no binding contractual agreements. Where there are contractual agreements, it will honour the contract’s provisions but will provide no additional services. RBS has identified clients who are in breach of their policy, but does not make this information publicly available.[vi]
RBS was also found to have several investments in nuclear weapon producing companies identified by this report, more information can be found in the Hall of Shame.
We commend RBS for adopting a public policy on nuclear weapons. We recommend RBS exclude all activities of nuclear weapons producing companies . Moreover, RBS should apply its exclusion policy to all financial products including assets managed and should terminate existing investments in nuclear weapons associated companies currently in its portfolio. We look forward to engaging with RBS, so a strong and comprehensively applied policy may be listed in the Hall of Fame in a future update of this report.
RBC has a leaky policy on nuclear weapons; send them a message and tell them to fix it!
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Congratulations Royal Bank of Scotland. I saw on www.dontbankonthebomb.com that you have a policy limiting investments in nuclear weapons. I think it’s really important that you share my concern about these weapons, and I appreciate that there is a public policy.
However, the policy does have some loopholes and the Don’t Bank on the Bomb report shows how you still might invest in nuclear weapons producers. I am concerned about this, because RBS also invests my money and I don’t want to be associated in any way with the production of these inhumane weapons.
It would be great if RBS made the following changes to make the policy airtight:
• Exclude all activities of nuclear weapons producing companies;
• Apply the exclusion policy to all financial products including assets managed;
• Terminate existing investments in nuclear weapons associated companies currently in its portfolio.
With kind regards,
[ii] RBC, “Annual Report 2015”, page 110, available at http://investors.rbs.com/~/media/Files/R/RBS-IR/results-center/annual-report-2015.pdf, viewed 30 October 2016.
[iii] RBS, Environmental, Social and Ethical Risk Policy Summary Defence Sector”, 20 August 2014, p.1-2, available at http://www.rbs.com/content/dam/rbs/Documents/Sustainability/policies/New%20appetite%20statements/Defence%20ESE%20Appetite%20Statement.pdf, viewed 30 October 2016.
[iv] RBS, written response to PAX dated 8 May 2015.
[v] RBS, written response to PAX dated 8 May 2015.
[vi] RBS, written response to FairFin dated 24 April 2012.