The Royal Bank of Scotland Group (RBS) is an UK-centred bank with its headquarters in Edinburgh, Scotland, it serves 19 million personal, business and institutional customers across the globe.[1] At the end of 2016, RBS held GBP17 million (€19 million) in assets under management.[2]
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.”[3] In addition, RBS does not exclude entire companies but only restricts financing of certain activities related to nuclear weapons.[4]
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.[5]
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.[6]
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.
[1] RBS, “About Us”, website RBS (http://www.rbs.com/about.html), viewed 23 January 2018.
[2] RBC, “Annual Report 2016”, page 110, available at https://www.rbs.com/content/dam/rbs_com/rbs/PDFs/annual-report-2016.pdf, viewed 23 January 2018.
[3] RBS, Environmental, Social and Ethical Risk Policy Summary Defence Sector”, p.1-2, available at https://www.rbs.com/content/dam/rbs_com/rbs/PDFs/Sustainability/Downloads/Defence_policy_Dec_2016.pdf, viewed 23 January 2018.
[4] RBS, written response to PAX dated 8 May 2015.
[5] RBS, written response to PAX dated 8 May 2015.
[6] RBS, written response to FairFin dated 24 April 2012.
Last updated March 2018