SCOTLAND PLC: The financial industry in Edinburgh

Edinburgh is the second largest financial services centre in the UK after London, and despite its geographical size is the sixth largest investment management centre in Europe and the 15th largest in the world. Scotland is also home to three of the UK's top five life assurance and pensions companies as well as Royal Bank of Scotland, which is the second largest bank in Europe and one of the world's top 20.1

The financial services industry is one of the biggest employers in Scotland providing around 97,000 jobs (around 5% of the Scottish workforce) with a further 100,000 in support industries. An important part of the Scottish economy since the 1700s, it is today worth more than £20bn a year and accounts for 8% of Scottish GDP.2 Eight of Scotland's top 20 companies (those with a UK or international head office in Scotland or with 90% of their turnover generated in Scotland) are in the financial services sector.3

All three major Scottish banks - the Royal Bank, Bank of Scotland and the Clydesdale - design and print their own banknotes.4

The healthy and vibrant Scottish finance sector seems to be one of the major beneficiaries of the neo-liberal agenda, taking advantage of processes such as privatisation. Below we focus on some of the major Scottish finance companies with head offices in Edinburgh, and other significant organisations, most of which are based in the city. The pattern of these companies' investments is an indication of where money is invested by the sector as a whole. As can be expected the main investments across the board include the big oil companies, arms companies, international banks and drug companies. In many cases, topping the different investment lists are exactly the same companies such as ExxonMobil, Total, Microsoft, Shell, BP, Wal-Mart, Citigroup and HSBC. Even those with ethical investments sadly mostly include the big UK banks, mobile phone companies, GlaxoSmithKline and Tesco (see individual profiles for critiques and also www.corporatewatch.org.uk). In recent years, the main trends for these companies has been big mergers and demutualisations from a member/policy holder-owned structure into limited companies owned by other big institutional shareholders.

There are several key locations for the financial industry in Edinburgh: St Andrew's Square, George Street and Queen Street in the Georgian New Town; the new developments around Lothian Road and Morrison Street, and Edinburgh Park on the western outskirts. However, there are a number of other locations too. The 346-acre Edinburgh Waterfront brownfield development at Granton is planned as a centre for the financial industry, including a proposed Edinburgh World Trade Centre.

Banks

Royal Bank of Scotland Group (RBS)

Founded in 1727, RBS is not only the biggest company in Scotland,5 but the second largest bank in the UK and Europe after HSBC, ranking sixth in the world. 70% of the top 100 companies in Europe bank with RBS.6 It is in the top five of all companies listed on the UK stock exchange.

In March 2000, The Royal Bank of Scotland Group completed the largest takeover in British banking history with its hostile acquisition of NatWest in a £21 billion deal, which also cost 18,000 jobs. Its assets at 30 June 2004 totalled £519 billion, its profits over the previous half year up by 17% before tax.7

The company's chief executive is Fred Goodwin (also known as 'Fred the Shred' for his ruthless cost-cutting exercises),8 considered by Scotland on Sunday as the most influential man in Scotland.9 Peter Sutherland, a non-executive director of RBS Group, is also chairman of BP (see RBS funding of BP project, the Baku-Ceyhan pipeline), and was formerly a director general of GATT and the WTO.

The Group also includes Ulster Bank in Northern Ireland, which also has a strong presence in the Republic of Ireland; Ireland's First Active Plc; Coutts Group, which provides banking to 70,000 wealthy customers in 38 countries; Direct Line, providing insurance and financial services by telephone; Citizens Financial Group, based in Rhode Island (USA), the second largest bank in New England; Churchill, one of the UK's largest providers of insurance products; the asset finance company Lombard; and Style Financial Services Limited, providing retail credit and store cards. In addition to the UK, the Group has offices in Europe, the US, and Asia. It is developing its financial service activities across Europe with Santander Central Hispano of Spain. Tesco Personal Finance, a joint venture between RBS and Tesco, is one of the main supermarket banking brands in the UK.

Friends of the Earth ranks the Royal Bank of Scotland among the least ethical pension scheme providers in Britain, with a score of only 1 out of 15, based on the degree to which ethical, environmental and social considerations were even taken into account, and the mechanisms for customer control and the monitoring of policies in place.11

RBS signed up to the Equator Principles, which set certain environmental and social guidelines which any project must meet before they will lend money. However, it is funding the Baku-Ceyhan oil pipeline, which has been shown by Friends of the Earth to break these principles on over 150 counts.12 The Royal Bank of Scotland financed the pipeline by about $100m. Another bank, Intesa of Italy, has already pulled out of the project due to safety concerns. The Royal Bank of Scotland has ignored all concerns, and seems likely to fund similar projects in future.

The bank's 2003 (most recent) annual report flag-shipped RBS as a major financier of oil services company Petrofac's acquisition plans.13 Also celebrated were its services to Element Six, an Irish-based company mining diamonds in South Africa, formerly known as De Beers Industrial Diamonds.14 It is also a major funder of Peel Holdings, which owns Liverpool airport.15 The Bank is heavily involved in funding the civil aviation industry through its subsidiary RBS Aviation Capital, based in Dublin, which finances at least 98 civilian airlines in 36 countries.

In 2004, RBS initiated the refinancing, together with HBoS, of Abbot Group Plc, an offshore drilling, inspection and drilling support company to the tune of £80.2million.16

Natwest, part of the Royal Bank of Scotland Group, financed the Asia Pulp and Paper Company (APP), which was responsible for the destruction of 280,000 hectares of Indonesian rainforest over the space of 10 years. They are also in dispute with indigenous peoples over land rights.17

In June 2004 RBS US subsidiary, Citizens, was accused by Fair Finance Watch of racism in its lending practices. The group alleges that Citizens 'continues to disproportionately exclude and deny African-Americans' and Latinos' applications for mortgage loans'. It cites statistics from a number of US cities, such as Philadelphia, where it claims Citizens rejected 14 out of 15 mortgage applications from African-Americans in 2002. Only 6 out of 15 white applicants in Philadelphia were rejected, it is alleged.18

The group Friends of Al-Aqsa (FoAA), a British-Palestinian solidarity organisation had its bank accounts abruptly closed by the Royal Bank of Scotland in January 2005. The group is not under sanction by the government, although an organisation with a similar name is on a Home Office 'watchlist'. The bank has refused to discuss the issue, and merely informed Ismail Patel, chair of the Leicester-based FoAA, that a review had been conducted and the bank was no longer willing to provide him with facilities. He was given 30 days to transfer his personal and business accounts and the FoAA account.19 Threats of legal action and a mass consumer boycott persuaded the bank to reopen the accounts a few days later.20

A report by the US Bankruptcy Court investigating the Enron affair found that 'RBS aided and abetted certain Enron officers in breaching their fiduciary duties', and was aware of Enron's accountancy juggling concerning a power plant in Teesside. The report names four RBS executives, claiming they were among those involved in the deal.21

RBS was fined £750,000 in 2002 for breaches of money laundering regulations after it failed to show adequate documentation of customers’ identities for some accounts.22

The Royal Bank of Scotland was one of the major financiers of the Huntingdon Life Sciences animal testing centre,23 but gave up their support when they were informed that their staff and customers could become targeted by the animal rights movement.24

Halifax Bank of Scotland (HBoS)

Formed from the merger of the Halifax building society and Bank of Scotland in 2001, and head quartered in Edinburgh, HBoS ranks third in the list of Scotland's top 500 companies and is the seventh largest bank in Europe.25 The company employs around 68,000 staff.

HBoS subsidiaries also include considerable interests in Australia where it is said to have expansion plans:26 Bank of Western Australia Ltd, BankWest, Capital Finance and St Andrews Insurance; and UK companies Clerical Medical, Birmingham Midshires, Capital Bank, Godfrey Davis, Lex Vehicle Leasing, Hill Hire Plc, BM Solutions; The Mortgage Business; Rightmove; First Alternative; Esure; Employee Share Services; Mentor Professional Services; St Andrews Group, St James's Place Bank, St James's Place Capital Plc, and of course Banco Halifax Hispania, Bank of Scotland (Ireland) and Bank of Scotland (The Netherlands).

The HBoS is one of the largest commercial sponsors of sport and the arts in Scotland, to the tune of £19.5 million in 2003, and is best known for its sponsorship of the Scottish Premier League.

HBoS investments

Unlike the Royal Bank of Scotland, HBoS is less involved in overseas project finance. Since 2002 the Bank of Scotland consolidated its position as a leader in PPP/PFI type finance, bringing the first such deal to France as a partner in the construction of a new motorway.27 In 2004 it won a major share in an Australian PFI initiative, another road-building project.28 In 2004 the Bank of Scotland part-funded a £35m PPP/PFI deal with the City of Edinburgh Council for the Edinburgh Schools Partnership for the design, construction, financing and operation of 4 schools.29

In Glasgow the 3ED consortium, involving the Miller Group construction company, the Halifax bank (now HBoS) and Hewlett Packard computers, will organise construction and retain operational control of the school buildings for the next 29 years. The city council will rent the buildings from 3ED for an annual fee of £40.5 million, an arrangement that is guaranteed to continue for the next 30 years, allowing 3ED to re-coup £1.2bn. This move had been prepared for by the closure of 9 secondary schools in Glasgow, with a population of 30,000 pupils.

HBoS finances Wood McKenzie, a Scottish oil and gas consultancy firm also involved in Caspian oil and gas.30

In 2002 HBoS financed Philip Green's take-over of Arcadia, the retail group which owns high street brands such as Topshop, Miss Selfridge, Dorothy Perkins and Burtons.31 No Sweat UK has reported union repression and low wages in this group. Factories in London's Whitechapel producing goods for Arcadia were found to be paying substantially under the minimum wage, and other UK suppliers claimed that the company paid so little that they could not provide better wages or working conditions. In Bombay in 2002 there were reports of intimidation of union members, including harassment, physical assault and reduced work.32 In 2004, Philip Green wrote himself a cheque for £460 million as a result of profits from Arcadia,33 and the remainder went to HBoS, which holds the other 8% of the company.34

In 2002 HBoS launched asset manager, 'Insight Investors', which later that year started up an 'Investor Responsibility Service' which aimed to make it easier for 'institutional investors to demonstrate a commitment to addressing corporate responsibility issues, without compromising their financial objectives.'35 Rather than limiting the companies in which it invest, Insight Investors favours the 'constructive engagement' approach, hosting conferences and organising meetings. Thus, rather than withdrawing investment from environmentally destructive energy and mining companies,it invites senior managers to seminar about, for example, biodiversity and management of fragile ecosystems.36 The major companies invested in include: BAE Systems, BP, British Airways, Cairn Energy, Cadbury Schweppes, Diageo, Easyjet, GlaxoSmithKline, J Sainsbury's, Marks and Spencer's, Safeway, Scottish and Southern Energy, ScottishPower, Shell, Tesco, Tullow Oil and Unilever.37 The actual benefit of such investment in changing companies' ethical behaviour has yet to be demonstrated.

The Guardian reported that in November 2004, HBoS began charging up to £1.75 for cash withdrawals from its cash machines. This will hit lower income customers hardest especially those who have to use cash machines to withdraw benefits and pensions. With the closure of so many post offices in recent years, withdrawing benefits from cash machines is becoming more and more common.38

HBoS was fined £1.25 million in January 2004 for failing to protect against money laundering - they conducted an internal survey in 2002 and could not find records of necessary customer identification documents in 55% of cases.39 This is an astonishing statistic, suggesting that although the bank should have scrutinised all their customers’ accounts when money laundering legislation came into force, it did not do so.

Life assurance and insurance

Standard Life
 
Standard Life is second in the list of Scotland's top 500 companies. Founded in Edinburgh in 1825, the Standard Life Group provides pensions, savings, protection, life assurance, banking, investment and private medical insurance. It is Europe's largest mutual life assurance company, with total assets under management of £94.8 billion and over 12,000 employees worldwide, with 7,500 based in Edinburgh.

In 2004 the Standard Life Board decided to demutualise, and will put this to members before 2006, even though Standard Life members voted to remain mutual in 2000 and a recent survey showed that 80% of members wish it to remain a mutual.40

Standard Life Investments is one of Europe’s largest property managers, with over £8.5bn of commercial property under management.

Standard Life claims to run ethical investment funds although this accounts for less than 1% of its business. Its UK Ethical account includes shares in Tesco, Vodafone, RBS Group, HBoS and HSBC (see section on Mark Moody-Stuart for HSBC's activities).41 Its ethical stock also includes holding oil company, Cairn energy.42

Meanwhile, Standard Life's main European43 and North American44 funds invest customers' money in, amongst others, Total Oil, Siemens, Shell, ExxonMobil, Citigroup, and Bank of America.

Scottish Widows

Founded in 1815 as Scotland's first mutual life office, Scottish Widows is now the UK's second largest provider of pensions, life and investment products (also see section on Scottish Widows Investment Partnerships).45 In March 2000, it demutualised and became wholly owned by the Lloyds TSB Group. Scottish Widows currently employs around 4,000 people. Its headquarters is in Edinburgh, with offices in other parts of the United Kingdom.

AEGON UK

Aegon UKis part of the AEGON Group, one of the world's largest insurance and financial services groups. AEGON UK currently has assets under management of £34 billion. The Dutch-based parent company, AEGON N.V. manages assets of £200 billion.46 Aegon UK was formed in 1999 as a holding company for Scottish Equitable Plc, Scottish Equitable International (based in Dublin and Luxembourg) and AEGON Asset Management.

Founded in 1831, Scottish Equitable Plc provides individual and group pensions as well as investment and protection products. In 1999, it acquired the life assurance business of Guardian Royal Exchange. Scottish Equitable's own pension and investment funds are invested in companies such as BP, ExxonMobil, Citigroup, Microsoft, Wal-Mart, Bank of America, Total, Novartis, Siemens, Australian mining company, BHP Billiton, HSBC, GlaxoSmithKline and Shell.47 Scottish Equitable also invests in externally managed funds.

Scottish Equitable runs both 'Ethical' and a 'Socially Responsible Equity' pension funds which have investments in Vodafone, HSBC, GlaxoSmithKline and AstraZeneca.48

Scottish Life

Scottish Life was founded as a mutual life insurance company 1881 in Edinburgh but demutualised in 2001 and transferred its business to the Royal London Mutual Insurance Society Limited. It provides individual and company life assurance and pensions. Scottish Life is now the Independent Financial Advisors (IFA) division of Royal London Mutual Assurance Society i.e. all its business comes from IFA's. Details of the companies that Scottish Life pensions and life funds invest in were not available on its website.

Scottish Life, and Royal London’s other intermediary businesses, are based in Edinburgh where over 1000 staff are employed, with around 300 working in other parts of the UK and overseas.49

Fund managers

Scottish Widows Investment Partnership (SWIP)

SWIP manages over £82bn worth of funds, making it one of Europe's largest fund management companies.50 Its client base and its business operations (both under its own name and in partnership with local companies) encompass the United States, Europe and the Far East. Its parent company is Lloyds TSB Group.

SWIP's funds include the same range of companies, such as ExxonMobil, Microsoft, General Electric, Total, ENI, Novartis, Shell, BP and British American Tobacco. Scottish Widows' 'ethical' and 'environmental' funds both include GlaxoSmithKline, Vodafone and Tesco.51

SWIP's Central and East European Fund52 invests customers’ money in the Russian oil company Lukoil and Ceske Energeticke Zavody, the privatised Czech state electricity company, that runs the controversial Dukovany and Temelin nuclear power stations.53 Its Thai Euro Fund also predominantly invests in oil and gas companies including PTT and PTT Exploration and Production.54

SWIP recently initiated a holding in 3i (see below) and holds equities in UK-based multinational marketing and communications services group WPP, which owns greenwash PR company Burson-Marsteller. It is looking for ways to profit from China’s economic growth, and holds equities in Pacific Basin Shipping in Hong Kong, and Ping Am, the 'undervalued' Chinese life assurer. It also holds shares in the Australian mining company BHP Billiton.

Aegon Asset Management UK

Aegon Asset Management is an asset management company based in Edinburgh providing services to individuals and other companies. It employs around 250 people and manages £34bn in assets.

AEGON Asset Management invests in a range of companies from the Co-operative Bank to ExxonMobil, including Imperial Tobacco; BAT; US multinational casino operator MGM Mirage; BP; Shell; Total; ENI (German software multinational which sells specialist packages for the arms industry); GlaxoSmithKline; Novartis; Sanofi-Aventis; Johnson & Johnson; Microsoft; General Electric; Siemens; Wal-Mart; Royal Bank of Scotland, and Bank of America. AEGON's 'ethical' funds also bizarrely invests in Australian mining company, BHP Billiton, who has been the target of numerous environmental and human rights campaigns for behaviour such as threatening to evict Afro-Colombian and indigenous communities from their homes near the Cerrejon Norte coal mine in Colombia55 and walking away from a major environmental disaster at the OK Tedi mine in Papua New Guinea in 2002.56

Martin Currie Investment Management Ltd

Martin Currie is an independent company, 100% owned and managed by its 217 employees (44 of whom are investment managers). Established in the 1880s, it manages £7.7bn in portfolios for investors around the world. Its business focuses on investment in global stock markets. Its clients include financial institutions, charities, foundations, pension funds and investment trusts.

Martin Currie CEO Willie Watt previously worked for 3i (see below) and Malcolm Gourlay, a non-executive director, was Chair of Clyde Petroleum until 1997 and is a director of the Miller Group construction company.

Martin Currie markets itself to charities, but some of its investments can hardly be described as charitable. Its investment funds include holdings in mining company Rio Tinto; arms company Lockheed Martin; Iraq profiteers Weir and Aegis; chemical giant Dow;57 and other notables such as Cairn Energy, GlaxoSmithKline, BP, Shell, Imperial Tobacco, Diageo, AstraZeneca, Nestle and Newcrest Mining, which clear-felled forest in Indonesia causing 2,000 indigenous people to occupy the site and demand compensation in 2004.58

3i

3i invests globally in business start-ups, buy-outs and buy-ins, focusing on businesses 'with high growth potential and strong management'.59 3i profits from the development of businesses, buying part or whole companies cheap when they need funding, and selling them for a profit. It is also one of Europe's major oil and gas venture capital companies.

3i CEO Philip Yea was formerly a director of Diageo and Guinness. Its chair, Baroness Hogg was formerly deputy chair of arms company GKN. Robert Smith, a non-executive director, is chair of Weir Plc. 3i is based in Glasgow, and in Aberdeen which is the headquarters of its European oil and gas investment activity. To date, 3i has invested over £15 bn (including co-investment funds).

3i claims to be 'Europe's most active investor in the oil and gas sector'. 3i and the Ashley Group created RBG Ltd, out of three oil service companies in a £52million deal where Bank of Scotland provided the debt finance. RBG Ltd will have headquarters in Aberdeen and a presence in Baku, Azerbaijan as well as Kazakhstan and India. 3i invested $15million in Singapore Pearl Energy, an oil exploration and production company (August 2004). Other investments include John Wood Group Plc and Venture Production Plc. 3i also has holdings in mining company Foster Yeoman, which owns the Glensanda granite super quarry in Argyll, suspected to be a future nuclear waste dump (see box).

3i's involvement in the defence and aerospace industry includes holdings in SR Technics Switzerland; Airinmar; Leafield Group Ltd; SIRA Groupe, and Aardvark Holdings Ltd.

Glensanda Superquarry

The Glensanda superquarry, is one of the largest quarries in the world.66 It is owned by UK company, Foster Yeoman Ltd., one of the largest producers of aggregates and asphalt in the UK. Located on a 2,400 hectare estate on Loch Linnhe, opposite Port Appin in Argyll, it holds over 900m tonnes of granite, of which 62m tonnes have been extracted to date Opened in 1986, it produces 'crushed rock aggregate', and supplied pulverised granite for the lining material that went into the English half of the Channel Tunnel.67

The stone is quarried, crushed and fed through a 300m vertical shaft known as the ‘Glory Hole', then through a tunnel to the foreshore where it is further processed, graded and loaded onto ships. The entire granite mountain, Meall na Easaiche, is being quarried and it has long been rumoured that it will eventually become a nuclear waste dump.

Local people travel to work at Glensanda by ferry from Port Appin. There are no roads or recognised tracks to the Glensanda site. It is said to be surrounded by a high perimeter fence patrolled by security guards. Machinery and heavy excavating equipment is ferried across Loch Linnhe from Barcaldine, north of Oban.

Started by Sir Iain Noble and chaired by his brother Tim, the Noble Group is an independent investment bank, and one of Scotland’s biggest. It has over 80 employees in Edinburgh and London who own over 95% of its shares. It has three operating companies providing corporate finance/brokerage, fund management, and management and administration of 'investment vehicles'. This involves primarily PFI project companies, including managing relations with the public sector and tenants. Its PFI arm, Noble Project Finance, has stakes in 20 PFI projects in defence, health, education, prisons and transport. Examples include: a project to provide heavy equipment transporters to the MoD; an MoD accommodation project; 11 PFI hospitals, such as Luton and Dumfries, of which it wholly owns 8; a number of PFI consortia in primary, secondary and tertiary education; a Securicor 'secure training centre' in Milton Keynes; and a 100% stake in Inverness Airport’s new terminal building.

The Noble Group raised £34m in 2004 to fund BowLeven, the Edinburgh-based African oil and gas development group, to develop oil fields off Cameroon (see oil industry section).

Noble Group provides 'innovative tax efficient' investment products such as Venture Capital Trusts (VCTs) designed to 'shelter' the 3 main taxes - income, capital gains and inheritance - via venture capital trusts and enterprise investment schemes, which are exempt from inheritance tax and qualify for income tax relief for investors. According to John Christensen, international coordinator of the Tax Justice Network, 'businesses and banking systems have been reconfigured to bypass nationally-based tax and regulatory regimes...aggressive tax avoidance strategies...force governments to engage in harmful tax competition, while $50 billion flows to dirty money annually'.60

The Noble Group owns Gap Fund Managers Ltd, which manages the Strathclyde Investment Fund. The fund invested in Memex, a company based in East Kilbride and Virginia, which produces criminal intelligence software such as the Memex Information Engine, for police and defence intelligence customers.

Sir Iain Noble made public comments against black people 'setting up ghettos' in Scotland at the Scottish Countryside Alliance conference in April 2003.61

Franklin Templeton Investments (FTI, formerly Templeton Global Strategy Fund) is one of the world's largest fund managers with offices in 25 countries and over £196 billion under management for more than 9 million investors worldwide. Its headquarters is in the US and it is listed as Franklin Resources Inc. on the New York and London Stock Exchanges. Edinburgh is the centre of its northern European activities, where 180 staff are employed.

FTI's activities include deals in risk arbitrage and company bankruptcies. Through the many funds it manages, it invests in BAE Systems; Raytheon Co; Smiths Group with its subsidiary Smiths Aerospace; ExxonMobil; BP; Shell; Keppel, which builds oil rigs and operates in Azerbaijan, Kazakhstan, Bulgaria and United Arab Emirates; Hutchison Whampoa which has considerable oil and oil infrastructure interests in Canada and Asia; as well as GlaxoSmithKline, Pfizer, WalMart, Vodafone, Nestle, Aventis, Imperial Tobacco and Johnson & Johnson. FTI runs specialist biotechnology investment funds with holdings in a number of companies such as Genetech Inc and Amgen. Two of its funds hold shares in Diageo.

The US mutual fund industry has recently faced investigation by the authorities regarding improper trading. During 2004-2005, FTI has agreed to pay almost $150m back to investors and in fines to settle charges that it had violated securities laws in both the USA and Canada. FTI is also facing multiple class action and derivative lawsuits. 62

Aberdeen Asset Management (AAM) Group

AAM manages assets for institutions and private clients worldwide. It was formed in 1983, and has grown and acquired other companies. In summer 2004 it was managing assets of £20.6bn. It specialises in investment management products covering stock markets and bond markets worldwide. It owns Edinburgh Fund Managers Plc, its base in Edinburgh, and private equity fund managers Murray Johnstone, among other companies. CEO Martin Gilbert received a £325,000 salary in 2002/03. Former Tory foreign secretary, Sir Malcolm Rifkind, was a non-executive director receiving £25,000.63

AAM was was the biggest company involved in the collapse of split capital investment funds, many of which were advertised as low risk, in which investors lost millions. In December 2004, following investigation by the FSA, it agreed to pay £78 million compensation. In 2004 the firm reported a loss of £87.6million.64 Aberdeen Asset Management operates in Chile - £25 million worth of subscriptions to its offshore retail funds came from Chile in 2002 and it sold regulated funds to Chilean pension funds.65 It also manages the Aberdeen International India Opportunities Fund which invests in companies incorporated in India or which make profits from India. Through various other investment trusts it manages it invests in ExxonMobil, Shell, Microsoft, Johnson & Johnson, GlaxoSmithKline, General Electric and WalMart. It invests in Petroleo Brasiliero, the Brazilian Oil company which carries out exploration and production in Angola, Nigeria, Tanzania and Iran, and PetroChina, the Beijing-based oil and gas exploration company operating in China. It also holds shares in Diageo through two smaller trusts.

Footnotes

1. Talent Scotland website, 'Scottish Industry', http://www.talentscotland.com/view_item.aspx?item_id=1128, last viewed 10.03.05
2. Ibid.
3. Scottish Financial Enterprise, Press Release, Notes to Editors', 22.09.03, http://www.financescotland.com/index.taf?_p=NWS13411, last viewed 10.03.05
4. The Scottish Parliament website, briefing paper, James Hayes, 'The Legal Basis of Scottish Banknotes', 09.06.03, http://www.scottish.parliament.uk/business/research/briefings-03/sb03-51.pdf, last viewed 10.03.05
5. Number 1 by rank in the Scottish Business Insider, 'Top 500 Companies', http://www.insider.co.uk/guides/index.cfm, last viewed 10.03.05
6. Deloitte Annual Report 2004, 'Case study: Royal Bank of Scotland Group', http://clients.ctn.co.uk/deloitte/annualreport_2004/casestudies/rbs.asp, last viewed 10.03.05
7. Scottish Business Insider, see note 233
8. Richard Wachman, 'Fred the Shred: the irresistible rise and rise of a ruthless charmer', The Guardian, 27.07.03, http://observer.guardian.co.uk/business/story/0,,1006443,00.html, last viewed 10.03.05
9. 'Scotland's most powerful', Scotland on Sunday, 27.04.03, http://news.scotsman.com/archive.cfm?id=470422003, last viewed 10.03.05
10. All unreferenced information is from the investors' own websites or from Trustnet, http://www.trustnet.com/
11. Friends of the Earth Briefing, 'Top 100 UK Pension Funds. How ethical are they?', http://www.foe.co.uk/resource/briefings/top_100_uk_pension_funds.pdf, last viewed 10.03.05
12. Friends of the Earth Website, Corporates, 'Tell Royal Bank of Scotland - Put your money where your mouth is', http://www.foe.co.uk/campaigns/corporates/press_for_change/email_btc_banks/, last viewed 10.03.05
13. Royal Bank of Scotland Group Annual Report 2003, http://www.rbs.co.uk/Group_Information/Investor_Relations/Financial_Results/2003/report_accounts.pdf, last viewed 10.03.05
14. Ibid.
15. Royal Bank of Scotland Group, Done Deals: England and Wales,Winter 2003, http://www.rbs.co.uk/CBFM/Brochures_&_Publications/downloads/publications/archived_done_deals/done_deals_-_england_&_wales_(winter_2003).pdf, last viewed 10.03.05
16. Scottish Business Insider, see note 233
17. Friends of the Earth Briefing, 'Finance Initiatives for Sustainable Development', http://www.foe.co.uk/pubsinfo/briefings/html/20020819133903.html, last viewed 10.03.05
18. Conal Walsh, 'RBS 'excludes and denies' black Americans', The Observer, 06.06.04, http://observer.guardian.co.uk/business/story/0,6903,1232131,00.html, last viewed 10.03.05
19. Faisal al Yafai, 'Palestinian aid groups' accounts closed', The Guardian, 03.01.05, http://money.guardian.co.uk/saving/banks/story/0,12410,1383161,00.html, last viewed 10.03.05
20. Red Pepper February 2005
21. Jim Stanton, 'RBS chiefs named in Enron court papers' The Scotsman 31.12.04 http://news.scotsman.com/topics.cfm?tid=163&id=1479692004 viewed 31.3.05
22. FSA website, 'FSA fines Royal Bank of Scotland Plc 750,000 for money laundering control failings' 17/12/2002 http://www.fsa.gov.uk/pages/Library/Communication/PR/2002/123.shtml viewed 31.3.05
23. Jill Treanor, Steven Morris and Andrew Clark, 'Huntingdon Life: facing collapse in 36 hours' 3/1/01 The Guardian http://www.guardian.co.uk/uk_news/story/0,,423756,00.html
24. Michael White, 'Straw attacks banks that dumped protest firm' 13/3/01 The Guardian http://www.guardian.co.uk/uk_news/story/0,,451053,00.html viewed 31.3.05
25. Scottish Enterprise website http://www.scottish-enterprise.com/sedotcom_home/services_to_business_international/lis/about-scotland/about_scotland-keyfacts.htm last viewed 31.3.05
26. 'HBoS cultivates down under for growth' Sunday Herald 28 November 2004
27. 'Bank of Scotland Exports UK lead in PFI/PPP to Europe,' 05.07.02 http://www.hbosplc.com/media/pressreleases/articles/bos/2002-07-05-02.asp. Last viewed 16.3.05
28. Iain Dey, 'HBOS drives ahead with Australian PFI' 17/10/04 The Scotsman http://business.scotsman.com/topics.cfm?tid=497&id=1206572004
29. Scottish Business Insider
30. 'Caspian & Black Sea Oil and Gas Conference 2004 Key Facts' http://www.kievturk.com/?m=news&page=2&newsid=7. Last viewed 16.3.05
31. Julia Finch, 'Green gains £460m in Arcadia,' The Guardian 22.10.04 http://www.guardian.co.uk/business/story/0,,1333029,00.html Last viewed 23.03.05
32. 'A Partial Victory for Bed and Bath workers,' http://www.nosweat.org.uk/article.php?sid=468. Last viewed 16.3.05
33. Julia Finch, 'Green gains £460m in Arcadia,' The Guardian 22.10.04 http://www.guardian.co.uk/business/story/0,,1333029,00.html Last viewed 23.03.05
34. Philip Green pockets £460m dividend from Arcadia http://business.scotsman.com/topics.cfm?tid=368
35. 'Insight Investment launches investor responsibility service,' 23.11.02 http://www.csrwire.com/bsr/article.cgi/1422.html Last viewed 23.03.05
36. Insight Investment, 'Biodiversity: towards best practice for extractive and utility companies' 13.11.03 http://www.wbcsd.ch/web/projects/cement/tf5/biodiversity_consultation_document.pdf last viewed 23.03.05
37. 'Insight's engagement and voting 2003' http://www.insightinvestment.com/responsibility/reporting/ select_a_company_by_event.asp?1=A&2=A&yr=2003. Last viewed 16.3.05
38. Philip Inman, 'Taxed at the cash machine' Philip Inman, The Guardian 27.11.04 http://www.guardian.co.uk/guardian_jobs_and_money/story/0,,1360379,00.html last viewed 23.03.05
39. Heather Tomlinson, 'HBOS flouted dirty money rules' 16/1/04 The Guardian http://money.guardian.co.uk/saving/banks/story/0,12410,1124473,00.html
40. Scottish Financial Enterprise, 'Demutualisation bid fails,' 14.11.03 http://www.financescotland.com/index.taf?_P=NWS13398 last viewed 23.03.05
41. Investing Ethically - Fund Factsheet (pdf) http://uk.standardlife.com/content/saving/investing_ethically.html.
42. Standard Life's UK Ethical Fund Quarterly Update December 2004 http://sli-apps.realise.com/page.php?action=pdf&display=id&id=2371
43. European Fund - Fund Fact sheet http://uk.standardlifeinvestments.com/content/products/sl_funds/fund_details/ME2A02.html Last viewed 16.3.05
44. North American Fund - Fund Fact sheet http://uk.standardlifeinvestments.com/content/products/sl_funds/fund_details/ME2A03.html Last viewed 16.3.05
45. The Graduate Programme: Insurance and Investments http://www.lloydstsbgraduate.co.uk/insuranceInvestments.shtml. Last viewed 16.3.05
46. In Notes to Editors on press release 2.12.04 http://www.aegon.co.uk/html/m_021204.htm
47. http://www.scottishequitable.co.uk/funds/pension/factsheet_europe.htm; http://www.scottishequitable.co.uk/funds/pension/factsheet_america.htm; http://www.scottishequitable.co.uk/funds/pension/factsheet_balman.htm, Last viewed 16.3.05
48. http://www.scottishequitable.co.uk/funds/pension/factsheet_specialist.htm, Last viewed 16.3.05
49. 'Menu for Success say Scottish Life' - see Editor's notes from press release for information. 4.1.05 http://www.scottishlife.co.uk/scottishlife/news/archive/index.html?/scottishlife/news/archive/2004/09Septemebr/2 2.htm&article
50. “About Us” 31.12.04 http://www.swipartnership.com/about_us/index.htm
51. See Corporate Watch profile of Tesco www.corporatewatch.org.uk/profiles/tesco/tesco1.htm
52. Scottish Widows Investment Partnership, 'The Central and Eastern European Fund' January 2005 http://www.swipartnership.com/_assets/literature_pdfs/16259.pdf , last viewed 23.03.05
53. 'Anti-nuclear' means 'Anti-Temelin' WISE 20/10/00 http://www.antenna.nl/wise/index.html?http://www.antenna.nl/wise/536/5213.html
54. Ibid.
55. 'NGO's condemn BHP Billiton´s Human Rights Abuses In Colombia' 4/6/04 http://www.mpi.org.au/campaigns/rights/cerrejon/
56. Mining Campaign http://www.foei.org/mining/mess.html Last viewed 16.3.05
57. How low can Dow go? Greenpeace Press release, 23.12.02 http://www.greenpeace.org/international_en/news/details?item_id=95486
58. Locals Blockade Newcrest Mine in Indonesia 2.11.03 http://www.mpi.org.au/campaigns/protected/newcrest_blockade/
59. See www.3i.com
60. http://www.taxjustice.net/e/about/index.php
61. 'Fury as Sir Iain Noble admits: I'm a racialist', Sunday Herald 13.04.03
62. Franklin Templeton Investments website 'Statement on Current Industry Issues' March 3, 2005 http://www.franklintempleton.com/retail/jsp_cm/home/MF_trading_practices.jsp viewed 30.3.05
63. Aberdeen Asset Management 2002 Annual Report
64. Edinburgh Evening News 7 January 2005
65. Aberdeen Asset Management Annual Report 2002, published 20.12.02 http://www.aberdeen-asset.com/PageCreate.nsf/(exists)/68A68156DD8A4449802569EB00468B4F/$file/AAMannual0902.pdf?OpenElement Last viewed 21.03.05
66. Foster Yeoman website, 'Glensanda' http://www.foster-yeoman.co.uk/index.cfm?fuseaction=web.ObjectId.1581
67. Undiscovered Scotland website 'Port Appin' http://www.undiscoveredscotland.co.uk/appin/portappin/