Investors press RBC on climate
Shareholders question lender’s pledges at AGM
WE NEED TO CONTINUE TO EVOLVE OUR ENERGY STRATEGY. WE CAN CONTINUE TO, NEED TO, EVOLVE TOWARDS A NET-ZERO FUTURE. WE KNOW THERE’S AN URGENCY TO THAT AS WELL, WE SEE THE CLIMATE AROUND US.
— DAVE MCKAY, ROYAL BANK CEO
TORONTO • Royal Bank of Canada faced a steady stream of questions about the bank’s climate and Indigenous rights track record at its annual general meeting Thursday.
“We’re bringing a voice of nature,” said Tara Houska of the Couchiching First Nation, as she pushed the bank to use its position to accelerate the energy transition.
“Are you actually committed towards moving away from fossil fuels, moving away (from) something we know is killing us, towards a different way?” she asked.
In response, chief executive Dave Mckay said the bank does need to keep evolving, while also defending past decisions and pointing to several major policy rollouts.
“I couldn’t agree more that we need to continue to evolve our energy strategy. We can continue to, need to, evolve towards a net-zero future,” said Mckay.
“We know there’s an urgency to that as well, we see the climate around us, we see the climate volatility.”
In recent months, the bank has released an early outline of how it plans to work with clients to reduce their emissions — or potentially cut ties with clients who don’t respond — along with a commitment to triple renewable energy funding and other measures aimed at speeding up the transition.
The bank has also agreed to disclose in its next climate report how its fossil fuel funding compares with its clean energy funding after pressure from shareholders.
New York City Comptroller Brad Lander had led a shareholder resolution pushing the bank to release the funding ratio, something the bank had rejected until an aboutface last week, thereby avoiding a vote on it at the AGM.
However, critics in the room said the bank is still not doing enough as it continues to lend billions of dollars to oil and gas companies and to projects that damage the environment.
Many questions were focused on having RBC ensure there is proper Indigenous consent for projects that it funds, an issue that has been contentious for pipeline projects such as Coastal Gaslink and Trans Mountain.
Mckay said the bank has a detailed risk assessment method that follows the guidelines of the Equator principles, a global baseline for the finance industry.
“We feel confident that this framework allows us to decide which projects do deserve our support, and which don’t,” he said.
Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs, said he appreciates the bank’s efforts, but that they don’t go far enough to line up with the UN Declaration on the Rights of Indigenous Peoples.
“As long as RBC continues to fund controversial projects that don’t enjoy free prior and informed consent, we’re going to have troubles, cost overruns, TMX, Coastal Gaslink, billions and billions of dollars, litigation, fees and chaos and disruption.”
Mckay said the bank also factors in the economic participation of communities as part of its assessment, and that Coastal Gaslink has seen significant buy-in from First Nations, but that the bank will also continue to evolve its framework over time.