UK Treasury wins first round of RBS environment case

London, 22 October: A High Court judge has quashed an attempt by three NGOs to force the UK government to apply stricter environmental and social criteria to investments made by RBS, one of the banks nationalised during the credit crunch. However, the NGOs vowed to appeal the ruling.

Legal action launched in July by the World Development Movement (WDM), Platform and People & Planet has suffered an early setback, after an oral hearing earlier this week failed to secure the court’s permission for a judicial review.

“We’re incredibly disappointed with the court’s decision not to allow a full hearing on this important case and will be appealing the judgement,” said Deborah Doane, director of WDM, a social justice campaign group. The NGOs have seven days from the ruling to lodge an appeal.

“This is particularly hard to swallow after [Prime Minister] Gordon Brown’s soaring rhetoric on climate change [in a speech earlier this week]. We’re incredibly angry to see that just one day later, the Treasury outrageously argued that for a director of business to take environmental concerns into account would be a ‘burden’ and ‘handicapping’,” she added.

The NGOs argued that the Treasury has failed to apply its own rules requiring all government bodies to assess the environmental consequences of all policies and projects. RBS was bailed out by the government in October 2008 and is now 70% publicly-owned. Ever since the bail-out, environmental NGOs have lobbied for the government to use its stake to impose stronger environmental and social governance standards on RBS’ operations.

Ian Leggett, director of student climate campaign group People & Planet said: “This government has given itself a clear legal duty to assess the impacts of its spending on climate change which threatens young people and future generations. We believe they have failed in this duty.” He added that the ruling was “a flawed and dangerous decision in terms of the huge challenge that faces us of how to we become a low carbon society.

“If we don’t challenge investment patterns, we will completely fail.”

A Treasury spokesman said: "We welcome the court's decision. The government's shareholdings in banks are managed in the best interests of the taxpayer by UK Financial Investments. This includes ensuring that the banks have strong corporate social responsibility policies."