It’s almost enough to make you think the bank doesn’t take shareholder opinion seriously. Rather than issue a specific defense of how its “sustainable investment” practices allow it to fund fossil fuel expansion and projects opposed by Indigenous peoples, RBC instead answered (p. 96 here) the resolution we filed with vague generalities and platitudes, leaving investors none the wiser as to how the bank tries to square that circle.
Let’s go through some of the points RBC makes, together with our rebuttals:
- RBC talks about its “Commitment to Sustainable Finance,” as a guiding document, but this amounts to barely a page with high level principles and categories, as opposed to examples from other banks that lay out far more robust frameworks. There is no effort by RBC to say how its Commitment is aligned either with the Paris Agreement or even its own Net Zero Banking Alliance (NZBA) promises. The vague nature of RBC’s management of sustainable finance is part of the reason it has engaged in “sustainable finance” deals that actually increase emissions.
- RBC says it works with clients to establish “robust” sustainability strategies and meets the criteria set out by the International Capital Markets Association (ICMA) and the Loan Syndications and Trading Association (LSTA). But as we laid out in the proposal itself, neither of those sets of voluntary criteria require alignment with net zero. They are process guidelines that allow banks like RBC to define for themselves what “robust” means, including ignoring Scope 3 emissions from when oil and gas companies are expanding operations, as is the case with some of RBC’s “sustainability linked” deals.
- RBC reiterates from the shareholder proposal that it has adopted the Equator Principles, but then fails to account for how it repeatedly finances deals that have not achieved the Free, Prior, and Informed Consent (FPIC) of affected Indigenous Peoples, as the Equator Principles require. This was true for Line 3 (during the expansion of which RBC participated in a “sustainability linked” loan and bond for the developer), and for Coastal GasLink and the Trans Mountain Pipeline.
The most promising part of RBC’s response comes at the end when it acknowledges that the sustainable finance market is evolving and that it is open to reviewing and updating its approach – which is exactly what the shareholder proposal is asking for! We hope that investors will vote in favour so that RBC takes their input more seriously and gets on with making “sustainable finance” actually sustainable.