Climate-change funding warning to big oil firms

The Royal Bank of Scotland is to stop financing oil majors such as Shell and BP, unless they can satisfy the bank that their businesses are in line with the Paris climate agreement.

RBS, which is rebranding as Natwest, said big oil and gas companies have until next year to put “a credible plan” in place, or face losing the bank’s support.

“We plan a full phaseout from coal by 2030; also, to stop lending and underwriting to major oil and gas producers unless they have a credible transition plan aligned with the 2015 Paris Agreement in place by the end of 2021,” the bank said.

Several parts of the policy remain unclear.

An RBS spokesman told the PA news agency the bank has yet to set a cut-off point for what constitutes a “major” oil and gas producer.

Many oil companies, including most of the US giants, have started withdrawing their operations from Britain’s North Sea production. This has left room for smaller firms, many backed by private equity investors, to move in.

RBS is understood to be reluctant to cut off support for smaller oil and gas producers as the sector supports many jobs.

It will continue to work with smaller customers to help them make their operations greener.

It would have been unrealistic to expect some of the smaller producers to meet the 2021 deadline the bank has set for its larger customers, a spokesman said.

RBS also said it would stop lending to and underwriting firms where more than 15% of activities are related to thermal and lignite coal, unless they have a Paris plan by the end of 2021.