8.1.2 Example of a policy that is not comprehensive: RBS Group

RBS Group’s defence sector Environmental, Social and Ethical Risk (ESE) Policy states that the Group will not finance companies which are involved in nuclear weapons programmes, other than those of the UK, US or France. Companies involved in the nuclear programmes of the UK, US and France “undergo enhanced due diligence including review by a reputational risk forum or approver and evaluation every one or two years”. This means that major nuclear weapons producers, like BAE Systems and Lockheed Martin, are not automatically excluded from RBS Group investment. Moreover, the policy only covers RBS’ lending and investment banking operations, not its asset management activities, meaning that the bank can invest in companies involved in “prohibited” activities on behalf of third parties.

The example of RBS Group illustrates the need for financial institutions to adopt comprehensive policies prohibiting any financial involvement with nuclear weapons producers. Without such a policy, investments in nuclear weapons can continue.