Activists camped outside RBS's headquarters at Gogarburn, near Edinburgh, are hoping that 1,000 protesters will descend by Monday to oppose its financing of the fossil fuel industry. They are highlighting RBS's loans to oil companies that extract tar sands – an activity they say causes climate damage and destroys indigenous communities.
RBS is particularly vulnerable because, as one of the worst offenders of the financial crisis, it was bailed out by the Government. The money lent for questionable activities is therefore ours, the taxpayers'.
Julian Oram, the head of policy and campaigns at the World Development Movement, says: "If RBS were a private company, responsible only to its shareholders, that would be one thing; but for a publicly owned institution this isn't good enough. It is an open and shut case that RBS should be doing more."
RBS says oil sands make up a small part of its financing of the oil industry. The bank, under new management since late 2008, says it has set up a separate committee to scrutinise lending and wants to be an industry leader.
But all banks have come under pressure to clean up their acts on social and environmental issues in recent years. The most high-profile example of a bank raising its standards is the Co-operative Bank, which launched its ethical stance in 1992 and, among other things, refuses to finance the arms industry, fossil fuel extraction and animal experiments for household products. The Ecological Building Society and Triodos Bank also stand out for their sustainable banking policies. Mark Robertson, a spokesman for Eiris, which advises investors on social issues and governance, says: "There is a big distance between the pure-play ethical lenders and the big banks where, broadly speaking, not a lot has changed."
Eiris gives the high street lenders green, amber and orange lights on criteria such as ethical lending, the environment and carbon emissions. Of the big four, HSBC comes out top with no red lights. Barclays, RBS and Lloyds, on the other hand, have two red lights each.
HSBC, which in the past has faced protests at its annual general meetings over projects it finances in the developing world, is seen by most commentators as the most forward-thinking bank. The global giant has a lay preacher, Stephen Green, for a chairman and operates in more ethical hot spots than its rivals.
The big banks have tried to burnish their credentials by going carbon neutral or supporting local communities, but some believe much of it amounts to window-dressing. Simon Propper, the managing director of Context, a sustainability consultancy, says: "The major branded banks have all been concerned to present a green image, but have done it by focusing on their own housekeeping while avoiding the really important issues about how they invest their money and the companies they take on as clients."
The banks face pressure not just from activists but from their own investors. While many fund managers remain wedded to short-term returns at any cost, others are taking a longer view and calling banks and other companies to account on social and environmental issues that could cause them serious damage in future.
Karina Litvack, the head of governance and sustainable investment at F&C Investments, says a decade ago banks answered questions on ethics by pointing to philanthropic activities, but now the best – including HSBC, Standard Chartered and UBS – are trying to use their financial muscle to get clients to do better on the environment as well as issues such as child labour.
The big banks have, to some extent, tried to put their own houses in order by agreeing on the equator principles – global standards for project finance, which funds some of the most contentious investments, such as building dams and power plants. But they do not cover regular commercial lending where banks can be torn between ethical and business pressures.
Ms Litvack says: "When oil sands and any type of major investment have a significant impact, and where the regulatory framework is not sufficiently strong, do you or do you not fund client activities that are obviously causing damage where it is not illegal and where, if you don't fund it, a competitor will?" She adds that in developing countries, international banks facing pressure on these issues are up against local banks "that couldn't care less".
Even Mr Oram has some sympathy for the banks. In the UK, he says the Government has not given them enough incentives to channel lending into environmental projects and industries. "They will invest if they think that is the way things are going but they haven't got enough signals from the Government. Whether you like their imperatives or not they are what the banks operate under."
Mike Childs, the head of climate change at Friends of the Earth, says the banks will have to respond to environmental pressures to change their practices in the same way that Barclays succumbed to the withdrawal of student accounts in the 1980s and pulled out of Apartheid South Africa. "No business is impervious to pressure and certainly no business that operates directly with customers on the high street."
He adds that anger at the banks over the financial crisis could bring extra pressure because the public are more aware of how the banks operate and are willing to listen to protests. "Their licence to operate from the public is much more in question and they need to be much more receptive to public concerns."
Ms Litvack says: "These issues are fundamental. We need to say to the banks, 'You as a financing agent have such leverage over how your customers behave.' It needs the banks to take a more systemic view – which clearly they haven't been so great at in the past."
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