RBS will no longer provide backing for projects that are at odds with the global transition to low carbon.
The Edinburgh-headquartered bank won’t support new coal fired power stations, thermal coal mines, oil sands projects, Arctic oil projects, or unsustainable vegetation or peatland clearance projects.
The lender will also snub mining companies generating more than 40% of their revenues from thermal coal – a reduction from 65% – and power companies generating more than 40% of their electricity from coal – again, down from 65%.
RBS said it had funded more British renewable energy projects than any other UK bank for the last six years in a row.
In March, RBS committed to providing £10 billion worth of funding for the sustainable energy sector between 2018 and 2020.
Eighty percent of its energy project financing went to renewables in 2017.
Kirsty Britz, director of sustainable banking at RBS, said: “The RBS of 2018 is very different to the bank we were a few years ago. 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.”
Sonia Hierzig, project manager at responsible investment campaign group ShareAction, said: “The strengthened energy financing policies of RBS implement many of ShareAction’s recommendations for more robust management of climate-related risks.
“They also make RBS the bank with the strongest energy sector policies out of the top five UK banks. Based on this progress, RBS would now rank eighth in our climate ranking of the 15 largest European banks, up from 11th previously.
“This is an enrcouraging step forward in a relatively short space of time, and will hopefully inspire other banks to achieve similar progress.”