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Correspondence with the Bank of Scotland on Nuclear Weapons Funding

An exchange of correspondence between a Pax Christi Scotland member and the Bank of Scotland

30th November 2020

António Horta-Osório
Chief Executive
Lloyds Banking Group

Dear António Horta-Osório

I am writing to you as an account holder with Bank of Scotland to express my concern about Lloyd Banking Group’s relationship with the nuclear weapons industry. A recent report shows that Lloyds Banking Group made £3.4 billion available to some of the world’s major nuclear weapons producing companies between 2017 and 2019: https://nukedivestmentscotland.org/scottish-financial-institutions-financing-nukes/

I strongly believe that Bank of Scotland should not be financing companies that produce weapons of mass destruction.  Any use of nuclear weapons would constitute a war crime, given their inherently indiscriminate effects. Moreover, a nuclear war using as few as 100 of the world’s 15,000 nuclear weapons would have a devastating effect on the global climate, leaving at least two billion people at risk of starvation.

The unique danger posed by nuclear weapons was recognised by 122 countries when they adopted the UN Treaty on the Prohibition of Nuclear Weapons in 2017. The treaty prohibits member states from manufacturing, acquiring, possessing or using nuclear weapons and prohibits assistance with these activities. Honduras was recently the 50th State to ratify this treaty, thus ensuring that it will soon come into force. Financing is a form of assistance so when the treaty enters into force in January 2021, Lloyd’s Banking Group will be on the wrong side of international law.

The treaty has already increased the stigma associated with nuclear weapons and 94 financial institutions have divested since it was signed. Companies that continue to make nuclear weapons when the treaty enters into force will face a growing risk of reputational damage, making the them a poor investment choice.

I therefore urge Lloyd’s Banking Group to adopt a comprehensive policy which excludes all financial links with companies involved in the production of nuclear weapons.

If Lloyd’s Banking Group does not change its policy on investment in nuclear weapons, I will move my money to an institution which has a comprehensive exclusion policy.

I look forward to your response.

Yours sincerely,

(Name and address provided)

Account holder with Bank of Scotland

** Reply from the Bank of Scotland  **

17 June 2021                                                                                                

PO Box 761
Leeds
LS1 9JF

Our reference: 16097051

We’ve looked into your complaint

Dear —

Thanks for getting in touch about our investment strategy and commitments. We haven’t been able to talk about this, but I’ve looked into this for you and based on what we know, we’re declining your complaint. I appreciate this may not be what you expected, so I’d like to explain our decision and what you can do next.

Responsible Business

We recognise that there’s inherent ethical and social risk associated with the manufacture and

_ supply of weapons. We have a specific Exte:m a_l Sector Statement that outlines our lending policy as it relates to the Defence sector. With specific regard to nuclear weapons, we confirm that we’ll not support businesses who are involved in the manufacture, sale, trade, servicing or stockpiling of nuclear weapons, other than when these activities are undertaken in connection with the national nuclear weapons programmes of the UK, US or France. You can review our Responsible Business purpose and strategy in full at www.lloydsbankinggroup.com . Please use the following navigation:

Who we are, Responsible Business, Financing a green future

You’ll find information on how we’re managing sustainability issues and reducing our footprint and you can download and review all Sector Statements including the Defence Sector.

Corporate Investment

At Lloyds Banking Group, doing business responsibly involves managing risk effectively, making the right decisions and doing the right things for our customers, shareholders and our colleagues . We expect our corporate customers to comply with applicable international conventions, sanctions and embargoes, legislation and licensing requirements, whilst showing a clear commitment to robust Environmental , Social and Governance (ESG) risk management.

Your feedback

We don’t have any plans to update our Responsible Business purpose and strategy at this time but your comments have been recorded as feedback. Thanks for taking the time to let us know your thoughts.

If you have any questions, please get in touch

You can call me directly on 0800 096 1279. Our office is open 8am to 8pm Monday to Friday and 9am to 3pm Saturday, and someone can help you if I’m not available.

Yours sincerely

Erin Cassidy
Complaint Manager