Royal Bank of Scotland became the latest prominent financial institution to put in place internal limits on financing oil exploration in the Arctic and Antarctic.
Royal Bank of Scotland, or RBS, released an update to its environmental, social and ethical risk policy at the end of July that covered the bank's lending for upstream, midstream and downstream oil and gas activities. Among other things, the policy prohibited support to "projects involving oil exploration and production operations in Arctic (including the Arctic National Wildlife Refuge) or Antarctic areas." The policy also prohibited support for "projects involving the exploration and extraction of oil from oil sands."
"Oil & gas will continue to play an important role in the overall global energy mix but the exploration and production of oil & gas reserves can have adverse impacts on the environment and host communities, if not adequately managed," the British bank wrote in the policy document.
Other international banks have placed restrictions on project lending for activities that could exacerbate climate change and hurt the environment. These institutions include Barclays PLC and National Australia Bank Ltd. Barclays released an Energy and Climate Change statement in January notifying customers that it would conduct "enhanced due diligence" on new oil and gas exploration and production in the Arctic, along with other controversial fossil fuel operations such as coal mining involving mountaintop removal. National Australia Bank announced in a 2018 sustainability report that "we will not finance oil/tar sands extraction projects, and oil and gas projects within or impacting the Arctic National Wildlife Refuge area and any similar Antarctic Refuge."
Environmental groups including the Sierra Club have pushed banks to withdraw support for oil and gas projects in the Arctic and other sensitive areas. In an Aug. 6 news release, the Sierra Club said it had met with representatives from RBS to discuss how fossil fuel production posed a threat to people and wildlife in the Arctic Refuge region.
"Drilling in the Arctic Refuge would be a disaster for wildlife, the climate, and the human rights of the Gwich'in Nation, and any company associated with this destruction will suffer long-lasting damage to their reputation," said Lena Moffitt, senior director of the Sierra Club's Our Wild America campaign. "It's no surprise that a growing number of banks want to stay as far away from this debacle as possible."
The Gwich'in Steering Committee, a body formed by Gwich'in villages in northern Alaska and Canada to fight proposed oil drilling in the Arctic Refuge, also met with RBS officials to discuss their concerns.
"The Trump administration may have made up their minds about selling off our sacred lands, but the fight is far from over," Gwich'in Steering Committee Executive Director Bernadette Demientieff said in a statement. "We're glad to see RBS recognize that the Arctic Refuge is no place for drilling and we hope that other banks, and the oil companies they finance, will follow their lead."
The American Petroleum Institute, a trade association for the oil and natural gas industry, said oil and gas companies are involved in climate change and human rights as energy suppliers, employers and citizens. "Lenders are entitled to set their own standards, and as an industry, we recognize the need to operate at a high level across all of our operations," spokesman Scott Lauermann said in an Aug. 7 statement.
In March, a federal judge struck down President Donald Trump's order to lift an Obama administration ban on drilling in the Arctic Ocean.