In response to today’s release of a Climate Report by RBC that finally addressed some of its own corporate impacts on our climate, partners in the network released the following response.
RBC Climate Report Falls Well Short of What’s Needed Amid Escalating Climate Crisis
One of the world’s largest financiers of fossil fuels shows no sign of slowing down in financing the climate crisis nor increasing respect for Indigenous rights.
Ahead of its annual shareholder meeting on April 11, Royal Bank of Canada released its Climate Report this morning with commitments to increase low-carbon financing, a clear response to growing public pressure faced by Canada’s largest fossil fuel financier. Unfortunately, the report fails to address necessary fossil fuel phase-out, making it insufficient and incremental to meet the scale of the crisis.
“Everyday there is harm caused to Indigenous communities by the projects RBC is financing, and the impacts on our health extend for decades and generations. This doesn’t change with some additional funding to renewables, and RBC needs to be accountable for the damage it is causing today. RBC will continue to face financial risk and opposition by financing projects that don’t have proper protocol and consent from Indigenous nations,” says Vanessa Gray, Divestment Coordinator, Indigenous Climate Action.
Report highlights include:
- RBC notes that it will triple low-carbon energy funding to $35 billion by 2030. While this initially may sound impressive, RBC pumped $38 billion into fossil fuel companies in 2022 alone. This means its ratio of clean to dirty energy financing would only be 1:1 by 2030, when experts at the International Energy Agency and BloombergNEF clearly state financing needs to be 4:1 by 2030. The New York City Comptroller filed a shareholder resolution calling for a report on the bank’s dirty to clean energy financing to be voted on at the bank’s annual shareholder meeting on April 11 in Toronto. The remaining question is whether RBC intends to scale-down its fossil fuel financing.
- RBC admits the majority of its oil and gas clients “do not have 1.5ºC aligned emissions reduction targets,” yet presents no plan for helping them transition or dropping them. According to the bank’s own data, only 2% of its oil and gas clients have 1.5ºC aligned transition plans and even these are not considered to be “Advanced” in the bank’s assessment of its clients. RBC says it is “committed to taking action to bring down our absolute financed emissions for this sector over time,” but has refused to set an absolute emissions reduction target for its business, relying on intensity targets that can lead to an increase in overall emissions. In a positive step, it has for the first time disclosed its absolute financed emissions at 71.4 million tonnes but this is massive and equivalent to emissions by all cars and light trucks in Canada in a year.
- RBC offers an updated definition of “Sustainable Financing.” Unfortunately, it continues to categorise greenwashed sustainability-linked loans and bonds to fossil fuel companies as “Sustainable Finance.” RBC also points to unproven carbon capture and storage projects (CCS) and biomass energy (burning of trees to produce power) to qualify as sustainable finance.
- RBC created a new CEO and executive compensation incentive if the bank makes progress on its climate-related goals.
The report fails to address the investment activities of a major part of RBC’s business, its Wealth Management and Asset Management divisions. RBC is top shareholder as a result of these divisions, in many major oil and gas companies including Suncor, Enbridge and TC Energy, all of whom are embroiled in highly controversial and contested fossil fuel expansion projects and rollbacks of climate related commitments.
RBC is one of the world’s largest fossil fuel financiers, according to the Banking on Climate Chaos report, financing over US$38 billion in coal, oil, and gas in 2022 alone. This comes after the International Energy Agency (IEA) released its World Energy Outlook report last fall, which reveals how Canada’s financial institutions, led by RBC, are dragging the country backward on the “unstoppable” transition to clean energy by doubling down on fossil fuels.
“Thanks to our growing and powerful movement, RBC is taking a small step forward with a commitment to triple low-carbon energy financing by 2030. But RBC’s financing of dirty coal, oil and gas – to the tune of $37 billion in 2023 – is like pouring fuel on the fire while considering buying a fire extinguisher,” said Richard Brooks, Climate Finance Director, Stand.earth. “These incremental steps are insufficient and irresponsible on the heels of the hottest year on record and an increasingly year-round wildfire season. Canada’s largest bank has a responsibility to all of us to accelerate the energy transition. We’ll keep pushing to get them to meet the moment we are in.”
RBC’s latest commitments come as the bank continues to be under active investigation by Canada’s Competition Bureau for allegedly misleading the public about its climate record using greenwashing ads.
“RBC can finesse its messaging and attempt to greenwash its targets, but students and young people in Canada have no interest in playing a numbers game. As long as RBC continues to fund fossil fuel expansion with no plan for wind-down, students will continue to see that RBC is putting our futures at risk”, says Evelyn Austin, Executive Director, Change Course.
Earlier today, InfluenceMap released a new report revealing Canada’s Big Five banks are undermining net-zero commitments through fossil fuel financing, lack of strong sector policies, and inconsistent policy engagement. RBC fossil financing actively undermines Canada from achieving its 2030 and 2050 climate goals.
“Allowing banks to set their own rules based on how far their oil clients are willing to go – rather than what science and communities on the frontlines of extraction say is necessary – is a recipe for climate disaster,” added Laura Ullmann, Head of Climate, Greenpeace Canada. “Today’s announcement by RBC shows just how badly we need the Minister of Finance to regulate the banks if we are to have any hope of achieving the government’s own climate & reconciliation targets.”
RBC’s continues to back climate-destroying projects in Canada and around the world, including Coastal GasLink and TransMountain that lack Free, Prior and Informed Consent (FPIC) of Indigenous peoples, and destroying lands from British Columbia and the Gulf Coast, to Amazonia and East Africa, and beyond.
We continue to call on RBC to:
- Stop financing fossil fuel expansion and stop funding projects like Coastal GasLink and TransMountain.
- Respect Free Prior and Informed Consent (FPIC) in all financing decisions.
- Credible plan for a fossil financing phase out, with matching restrictive policies, in line with the conclusions of the IEA’s net-zero emissions scenario on no fossil fuel expansion. This must include oil and gas sectoral targets of a 50% absolute emissions reduction covering all aspects of RBC’s business including scope 1, 2, and scope 3 emissions (including financed emissions) by 2030.
