As RBS sets new environment targets, we look at our relationship with Oil & Gas companies, and why it's good business to care about the green economy.
How does a global bank like RBS coordinate its efforts to control its energy, water and waste?
We have a dedicated Sustainability team that coordinates what's going on across the Group and pull it together as one strategy.
We've set some ambitious targets for 2020 for some of our key impact areas: travel emissions and paper. In the past we tended to be more conservative; targets were more straightforward and we knew how we were going to meet them. But the targets are more demanding this time.
What are the biggest challenges for 2012 and beyond?
We're still seeing a rise in our emissions from travel. These are tough to reduce in the short term, but over a longer period wider adoption of virtual meetings will help us meet our 2020 target. Video conferencing is available now of course, but new ways to communicate that are simpler to use are appearing already.
What impact will lowering our CO2 emissions have on other areas?
Reducing our travel emissions will have a knock on effect: using more electronic communications may mean we can use less paper and as a result, create less waste. They're all closely connected.
Why should a bank care about environment targets?
We're not a massive user of natural resources but we do use a lot of energy to power our computers and data centres. Our energy bill is significant, so if we can shave 10% off that, it would mean a large saving.
How do we compare to other banks?
With these new targets we compare pretty well. Targets are easy to set, but it's how you achieve them that's important. For us it's been complicated by the fact RBS is shrinking. Are we truly saving energy or is it just a result of selling buildings? That's why we've set a relative baseline.
How important is this to our stakeholders?
More than 7% of our institutional investors have "Socially Responsible Investors" funds, so this is very important to our stakeholders.
In 2012 we're doing a carbon footprint exercise which will help us comply with carbon emissions reporting requirements. But we also cover lots of other issues in our sustainability reporting and there are various indices that investors use.
RBS sometimes comes under pressure because of links to the Oil & Gas industry. Are any changes likely?
Being a big bank, we're linked to most sectors of the global economy including the oil and gas industry. Our project finance is now almost all in renewable energy, but within general corporate lending we still have relationships with big oil and gas companies. It will be very difficult to see us walking away from those relationships while they are still so important to the global economy.
Is there a danger that some of the progress we make with some sectors may be overshadowed by our relationships with those companies?
A lot of oil companies are themselves investing heavilly in alternative energy technologies, so it's not necessarily a bad thing to be lending to them. In the meantime the world still needs oil and gas - we're not going to have a transition to a zero-carbon economy overnight.
Our revised lending policies make sure that when we do lend to these sectors, we check the possible human rights and environmental impact. We have dedicated teams of experts who advise on responsible lending.
We're never going to win all the headlines, but the most important things for us to do is support the green economy which is showing steady growth. There are companies in this sector with exciting products that save energy or water, and their markets are huge.
RBS needs to get behind this because it's a growing market.