TWO multinationals regularly criticised for their environmental record are up for the title of Scotland's most environmentally friendly business at the nation's leading green awards.

Edinburgh-based bank RBS and British oil company Shell have both been shortlisted for the Government-backed 2012 Vision in Business for the Environment of Scotland (Vibes) awards, to be announced in Glasgow this week.

The selection of the two firms has infuriated environmentalists who label them as among the world's worst polluters. They are demanding that the companies' nominations be abandoned.

"To suggest RBS and Shell are paragons of virtue and to brand these awards as green is to corrupt the meaning of the word," said Green MSP Alison Johnstone.

The environmental reputation of RBS was "shredded" and Shell was guilty of major oil spills, she said. "I don't know who decided on the shortlist but they're astonishingly out of touch."

RBS's headquarters at Gogarburn in Edinburgh and Shell's St Fergus Gas Terminal in Aberdeenshire have both been shortlisted in the large company management category of Vibes. The Shell plant has also been shortlisted for a waste award.

The winners of the Vibes, which are supported by the Scottish Government and half a dozen of its agencies, will be unveiled in Glasgow on Thursday.

Vibes says the awards are to recognise "those working in Scotland that are trying to help make our country more environmentally aware and work towards Scotland's 2020 carbon reduction targets".

But Friends of the Earth Scotland pointed out that RBS is the UK's biggest funder of fossil fuels and also backs firms involved in exploiting tar sands in Canada, dubbed "the most destructive project on Earth".

Paul Daly, the environmental group's corporate accountability campaigner, called on Vibes to drop RBS from their shortlist "in order to maintain credibility".

Vicky Wyatt of Greenpeace argued that Shell should not be in line for any kind of green award.

"It is without doubt one of the least green companies on the planet," she said. "Their plans to drill in the pristine and fragile Arctic for oil are a huge threat to the environment."

Vibes stressed that the awards were for business operations in Scotland, rather than their global impact. RBS and Shell had been shortlisted for their commitment to "sustainable practices" at their Scottish sites, said a spokesman.

"The final shortlist has been chosen using robust criteria and all have demonstrated commitment to reducing environmental impact on their Scottish sites," he added.

Shell said it had succeeded in reducing carbon emissions by 5% between 1990 and 2010, and by a further 3% in 2011.

"We continue to roll out our global carbon dioxide energy management programmes, which use common tools, techniques and technology across our operations to optimise energy use," said a spokesman.

RBS declined to comment.