Governance

UK banking giant RBS cuts links to cluster bomb clients

Chief executive sends email response to campaigners

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UK banking giant Royal Bank of Scotland has confirmed that it is cutting its links with clients involved in cluster bomb manufacture, following a campaign spearheaded by Amnesty International.

RBS Chief Executive Stephen Hester has announced that the bank will suspend all further lending to any client where it cannot be certain they are in compliance with the Oslo Convention on cluster munitions.

The comments come in emails Hester has sent to campaigners that have been verified by an RBS spokesperson to Responsible Investor. The spokesperson declined to name the companies, citing client confidentiality, though the Independent reported they are understood to be Alliant Techsystems and Lockheed Martin.

Amnesty said last week that RBS recently agreed an $80m loan to Alliant and also helped arrange a bond issue by Lockheed Martin. The NGO said more than 10,000 people had directly emailed Hester to demand the 84% state-owned bank cut its ties with cluster munitions firms.“After discussions with various NGO groups we have identified some defence sector clients whose activities could be considered to be outside the spirit of the Convention,” Hester’s email reads. “As a result, we will be suspending all further services to any client where we can not be certain that they are in compliance with our policy.” The bank will work with the government and NGOs to create clarity on this issue – and encourage other banks to do the same.

“We will always seek to ensure that we only deal with defence sector clients whose activities are compliant with both the letter and the spirit of the Convention.” RBS is a signatory to both the Equator Principles and the UN Global Compact.

Earlier this month, insurance giant Aviva has informed Amnesty that it has reviewed its position on directly investing in companies which produce cluster bombs. And just last week the NZ$19.2bn (€11.2bn) New Zealand Superannuation Fund had to fight criticism from the Green Party over cluster bomb investment.