Annual Climate Report provides first
insights on assessment of RBC Capital Markets' energy client
transition plans; new actions from RBC to provide capital for
renewable energy and other low-carbon energy, invest in climate
solutions and accelerate capital deployment to support clients'
emissions reduction efforts
TORONTO, March 6,
2024 /CNW/ - RBC today announced three new actions it
intends to take to help accelerate the transition to a greener
economy. These actions are included as part of the release of the
RBC Climate Report 2023, an annual update from the bank on progress
made against the bank's climate strategy. The bank also released
its 2023 Environmental, Social & Governance Progress Report and
2023 Public Accountability Statement.
- Triple lending for renewable energy across RBC Capital
Markets and Commercial Banking and grow RBC's overall low-carbon
energy lending to $35 billion by
2030
- Allocate $1 billion by 2030 to
support the development and scaling of innovative climate
solutions
- Accelerate capital deployment to emissions reduction efforts
with a new decarbonization finance category within RBC's
Sustainable Finance Framework
In 2023, RBC was the first major Canadian bank to release a
formal approach – the Client Engagement Approach on
Climate – Energy Sector – for how its capital markets business
will engage with energy clients (oil & gas and power
generation) 1 on climate, including a framework to
assess their transition plans. The results of the initial
assessment show that the majority of energy clients have started
preparing for the energy transition, with 79 per cent of RBC
Capital Markets' lending exposure in energy to clients who have
established transition plans.2
"These insights into how prepared our clients are for the
transition to net-zero are critical to helping us identify
opportunities and areas of focus to help them bring down emissions.
It tells us that most are on the journey, and they need advice and
capital to get there," said Jennifer
Livingstone, vice president, Climate. "The actions we are
announcing today will help support our clients in their efforts to
reduce emissions, contribute to bringing more renewable energy
online and provide needed capital to innovative climate
solutions."
The assessment results highlight the need to move more urgently
to reduce emissions. RBC found that aligning to a 1.5°C temperature
outcome is challenging at this early stage.
In addition, RBC disclosed progress against its interim
emissions targets for the first time. Client actions to transition
to low-carbon energy sources are beginning to be reflected in
progress for the power generation sector, where the Scope 1
physical emissions intensity has declined relative to the 2019
baseline. This decline also reflects steps RBC has taken to grow
lending in the power generation sector to clients that have a
greater share of renewable and other low-carbon energy sources.
Scope 1-3 physical emissions intensity for the oil and gas sector
has stayed relatively flat compared to the 2019
baseline.3
_____________________________
|
1 As defined
in RBC's Client Engagement Approach on Climate – Energy
Sector.
|
2 See
Climate Report 2023 for details, including clients which were
in-scope for the assessment.
|
3 5%
decrease in Scope 1 and 2 physical emissions intensity between 2023
and the 2019 baseline; 5% increase in Scope 3 physical emissions
intensity between 2023 and the 2019 baseline.
|
Tripling lending for renewable
energy across RBC Capital Markets and Commercial Banking and
investing in new climate solutions
RBC plans to triple its lending for renewable energy across RBC
Capital Markets and Commercial Banking in support of global
ambitions to increase renewable energy supply, and to grow the
bank's low-carbon energy lending to $35
billion by 2030.
To achieve their climate goals, clients will require new and
emerging climate solutions that are not yet at scale. To support
the development and scaling of these solutions, RBC also plans to
allocate $1 billion by 2030 to funds
and companies that are advancing climate solutions. This new goal
is in addition to the continued philanthropic funding provided by
RBC and the RBC Foundation through RBC Tech for Nature™ and its
support through RBC's national cleantech practice within RBCx™.
Accelerating capital deployment
for decarbonization
RBC has established a decarbonization finance category within
its Sustainable Finance Framework that aims to increase clarity for
its clients on eligible decarbonization activities and to help
accelerate capital deployment to emissions reduction efforts in
high-emitting, hard-to-abate sectors. The category is informed by
emerging industry guidance as well as the business realities of its
clients. RBC recognizes the need for greater harmonization of
standards, taxonomies and reporting of sustainable finance
activities across the financial sector and will continue to
contribute to national and international efforts in this
direction.
Advancing accountability and
reporting on progress
RBC has included additional disclosures in this year's Climate
Report on its absolute financed emissions for the oil & gas
sector on an authorized loan basis. Absolute emissions from the oil
& gas sector must decline over time as part of the transition
to a net-zero economy. RBC is committed to taking action to bring
down its absolute financed emissions for this sector over time.
This includes support for clients' decarbonization efforts
alongside the acceleration of the bank's strategy to prioritize
working with clients who are proactively taking steps to
decarbonize.
In addition to the 2023 Climate
Report, RBC released two other reports today…
The 2023 Environmental, Social and Governance (ESG) Progress
Report provides an overview of the bank's ESG focus areas, key
performance indicators and highlights from 2023. The report is
framed around the RBC Purpose Framework – Powering Ideas for
People and PlanetTM. It sets out the three societal
ambitions where RBC believes it can have a meaningful impact:
accelerate the transition to a greener economy, equip people with
the skills for a thriving future, and drive equitable prosperity in
the communities in which we operate.
The 2023 Public Accountability Statement (PAS) outlines RBC's
contribution to the economy and society in Canada – key measures supporting RBC's Purpose
to help clients thrive and communities prosper.
"We are proud of the progress made in 2023 on the societal
challenges impacting our business and our communities," said
Andrea Barrack, senior vice
president, Corporate Citizenship & ESG. "As an organization we
are focused on how we can power ideas for people and the planet to
accelerate the transition to a greener economy, equip people with
skills for a thriving future and driving more equitable
prosperity."
Caution Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of certain securities laws, including the "safe
harbour" provisions of the United States Private Securities
Litigation Reform Act of 1995 and any applicable Canadian
securities legislation with respect to Royal Bank of Canada's (we, us or our) 2023 ESG Progress
Report, 2023 Climate Report and 2023 Public Accountability
Statement.
Forward-looking statements in this press release include, but
are not limited to, statements relating to our economic,
environmental (including climate), social and governance-related
objectives, vision, ambitions, commitments, goals, metrics and
targets, including our initial 2030 interim emissions reduction
targets (interim targets) as well as our impacts, our ultimate goal
of achieving net-zero in our lending by 2050, which includes (i)
our goal to triple lending for renewable energy across RBC Capital
Markets and Commercial Banking and to grow our overall low-carbon
lending to $35 billion by 2030, and
(ii) our goal to allocate $1 billion
by 2030 to support the development and scaling of innovative
climate solutions, our three societal ambitions under the RBC
Purpose Framework - Powering Ideas for People and
Planet, our commitment to facilitating $500
billion in sustainable finance by 2025 , including through
accelerating capital deployment to emissions reduction efforts in
high-emitting, hard-to-abate sectors with a new decarbonization
finance category, to support our clients' ESG objectives and our
approach and methodology for classifying, tracking and disclosing
performance towards this commitment; our commitment to take actions
to bring down emissions from the oil & gas sector over time;
and our intention to take certain actions based on the results of
RBC Capital Markets' assessment of its energy clients' transition
plans;. The forward-looking information contained in this press
release is presented for the purpose of assisting our stakeholders,
including holders of our securities and financial analysts, in
understanding our vision, ambitions, commitments, goals, metrics
and targets, as well as our economic, environmental (including
climate), social and governance-related impacts and objectives,
including the ways we intend to address climate-related governance,
strategy, risks, opportunities, metrics and targets, and may not be
appropriate for other purposes. Forward-looking statements are
typically identified by words such as "believe", "expect",
"expectation", "aim", "achieve", "suggest", "seek", "foresee",
"forecast", "schedule" "anticipate", "intend", "estimate",
"commit", "goal", "plan", "strive", "objective", "target",
"outlook", "timeline" and "project" and similar expressions of
future or conditional verbs such as "will", "may", "should",
"could", "can" or "would" or negative or grammatical variations
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By their very nature, forward-looking statements require us to
make assumptions and are subject to inherent risks and
uncertainties, both general and specific in nature, which give rise
to the possibility that our predictions, forecasts, projections,
expectations or conclusions will not prove to be accurate, that our
assumptions may not be correct, and that our environmental and
social or other objectives, vision, ambitions, commitments, goals,
metrics and targets and strategies to mitigate and adapt to
climate-related risks and opportunities, and economic,
environmental, social and governance-related impacts and objectives
will not be achieved and that our actual results may differ
materially from such predictions, forecasts, projections,
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standards, metrics and measurements used in preparing this press
release continue to evolve and are based on assumptions believed to
be reasonable at the time of preparation, but should not be
considered guarantees.
We caution readers not to place undue reliance on these
statements as a number of risk factors could cause our actual
results to differ materially from the expectations expressed in
such forward-looking statements.
These factors – many of which are beyond our control and the
effects of which can be difficult to predict – include but are not
limited to: the need for more and better climate data and
standardization of climate-related measurement methodologies,
climate-related conditions and weather events, the need for active
and continuing participation and action of various stakeholders
(including governmental and non-governmental organizations, other
financial institutions, businesses and individuals), technological
advancements, the evolution of consumer behaviour, evolving social
views on ESG-related topics, varying decarbonization efforts across
economies, the need for thoughtful climate policies around the
world, the challenges of balancing emission reduction targets with
an orderly and inclusive transition and geopolitical factors that
impact global energy needs, our ability to gather, analyze and
verify data, our ability to successfully implement various
initiatives throughout the company under expected time frames, the
risk that initiatives will not be completed within a specified
period or at all or with the results or outcomes as originally
expected or anticipated by RBC, the compliance of various third
parties with our agreements, policies and procedures, and their
commitments to us, financial market conditions, our business
operations, our financial results, condition and objectives, the
legal and regulatory environment, and regulatory compliance (which
could lead us to being subject to various legal and regulatory
proceedings, the potential outcome of which could include
regulatory restrictions, penalties and fines), and cyber,
strategic, reputation, competitive, legal and regulatory
environment, model and systemic risks and other risks. Additional
factors that could cause actual results to differ materially from
the expectations in such forward-looking statements can be found in
the risk sections of our Annual Report for the year
ended October 31, 2023 and the Risk management section of our
Quarterly Report for the three month period ended January 31,
2024.
We caution that the foregoing list of risk factors is not
exhaustive and other factors could also adversely affect our
results. When relying on our forward-looking statements to make
decisions with respect to us, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events, as well as the inherent uncertainty of
forward-looking statements. Except as required by law, none of RBC
nor its affiliates undertake to update any forward-looking
statement, whether written or oral, that may be made from time to
time by us or on our behalf.
About RBC
Royal Bank of Canada is a
global financial institution with a purpose-driven, principles-led
approach to delivering leading performance. Our success comes from
the 94,000+ employees who leverage their imaginations and insights
to bring our vision, values and strategy to life so we can help our
clients thrive and communities prosper. As Canada's biggest bank and one of the largest
in the world, based on market capitalization, we have a diversified
business model with a focus on innovation and providing exceptional
experiences to our more than 17 million clients in Canada, the U.S. and 27 other countries. Learn
more at rbc.com.
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through donations, community investments and employee volunteer
activities. See how at rbc.com/community-social-impact.
SOURCE RBC