FinanceMap scores this financial institution in the following areas. Please navigate to the relevant tab for in-depth analysis
FinanceMap assesses these portfolios for this financial institution. Please navigate to the relevant tab for in-depth analysis.
The Royal Bank of Canada's (RBC) board has oversight of the organization’s climate change strategy and the management of climate-related risks and opportunities through four board level committees. Additionally, senior management are assigned climate-related responsibilities and are involved in the implementation and management of the organization’s climate strategy.
RBC discloses some climate-related risks and opportunities it considers relevant, and defines different time horizons, but it is unclear which risks it considers over which time horizons. It outlines several processes used to determine material risks and opportunities, including its Sustainable Finance Framework, and Enterprise Policy on Environmental and Social Risk. It appears to consider climate-related risks and opportunities across multiple business areas including capital markets, business banking, personal banking, and wealth management.
The organization is transparent about the impact of climate-related risks and opportunities on its corporate strategy and financial planning, and discloses its eligible green financing instruments, client engagements, and its own net zero advancements.
RBC has disclosed the use of several scenario analyses in past reporting, including three scenarios in its 2022 Climate Report, as well as a pilot project convened by the Bank of Canada and the Office of Superintendent of Financial Institutions (OSFI) and a flooding scenario analysis in its 2021 TCFD Report. In its 2023 Climate Report, RBC has disclosed six scenarios assessing physical and transition risks, as well as some implications on its strategy and business model, but has not disclosed how it plans to respond to effects identified.
RBC sets out standards for how environmental and social risks are identified and assessed in its Environmental and Social Risk Policy. In past years RBC has included heatmapping exercises in its reporting to demonstrate how it assesses the relative significance of climate-related risks, however it did not provide an updated heatmap in its 2023 Climate Report.
The organization highlights some processes in place to manage climate-related risks, such as its Enterprise Policy of Environmental and Social Risk, which sets out standards for how E&S risks are managed, mitigated, monitored and reported on. RBC has integrated climate-related risks into overall risk management through its overarching Enterprise Risk Management Framework and its Enterprise Risk Appetite Framework.
RBC discloses various key metrics used to measure and manage climate-related risks and some climate-related opportunities, including exposure to carbon-related assets, sustainable finance metrics, and some details on remuneration incentive policies. The organization discloses Scope 1 and 2 emissions as well as limited relevant Scope 3 emissions. It has disclosed absolute financed emissions for four sectors, including oil and gas, power generation, automotive, and agriculture, and is working to improve the data quality of its measurements using the PCAF reporting standard.
RBC has set a net-zero by 2050 target and in October 2021, it joined the Net Zero Banking Alliance. RBC outlined its initial 2030 interim targets in October 2022 for three sectors: oil and gas, power generation, and automotive.
RBC is not aligned with IPCC guidance on the role of coal in the energy mix up to 2050. The organization has prohibited financing for certain coal activities including greenfield coal production, mountaintop removal, and new clients that operate significant thermal coal mining (≤ 60% revenue) or coal power generation assets (≤ 60% generation per megawatt hour (MwH)). However, it appears to otherwise provide coal financing given due diligence and has not outlined a coal phase out in line with IPCC guidance.
With regard to natural gas and oil, RBC has not mentioned either in its policy guidelines for sensitive sectors and activities and appears to be actively financing new or expansionary projects. RBC states that it will apply enhanced due diligence to exploration and development in the Arctic and ANWR, but has not prohibited financing of any unconventional activities. It has set an interim emissions reduction target for the oil and gas sector of a 35% reduction in emissions intensity for Scopes 1 and 2, and an 11-29% reduction in emissions intensity for Scope 3 by 2030.
RBC appears to be supportive of nuclear energy, but does not disclose a clear position on nuclear in the energy mix in general. The organization has set a $500 billion sustainable finance commitment by 2025 and is increasing its financing of renewables. RBC has outlined its approach to categorizing eligible activities for its commitment with a Sustainable Finance Framework.
FinanceMap’s Climate Governance and Policies analysis assesses statements financial institutions (FIs) are making on how they are incorporating climate issues into their decision-making and operations using FinanceMap’s matrix methodology. This methodology is adapted from the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and guidelines, Net-Zero Banking Alliance (NZBA) or equivalent Glasgow Financial Alliance for Net-Zero (GFANZ) initiative reporting, and IPCC and IEA technology statements. The TCFD provide guidance on 11 recommendations across four areas which are reflected in our matrix: Governance, Strategy, Risk Management, and Metrics and Targets. Additional benchmarks have been introduced to strengthen the ambition of scoring criteria in the assessment of targets, which are supplemented by guidance from the NZBA or equivalent GFANZ initiatives.
Additionally, Science-Based Policy (SBP) benchmarks are used to measure alignment of an FIs technology positions with the science of climate change. These benchmarks are applied to an FIs internal policies on technologies including coal, oil, gas, nuclear, and renewables and also assesses its engagement with broader climate and energy policy issues such as advocacy on the role and importance of different strategy types in the future energy mix.
For each TCFD recommendation and technology, FIs statements are applied to a five point scoring scale ranging from +2 to -2, measuring alignment with the relevant benchmarks. The detailed scores for this FI are displayed below within each matrix cell.
The following table outlines the key queries and data sources, which FinanceMap uses to assess financial institutions climate governance, targets and policies. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $556B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $300B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portion of AUM Assessed: $1.43B
| Holding Name | Contribution to Sector Production |
|---|---|
| NRG Energy Inc | 48.7% |
| Southern Co | 14.0% |
| Enel SpA | 12.9% |
| Engie SA | 9.1% |
| Endesa SA | 4.2% |
| Energy of Minas Gerais Co | 2.9% |
| Tenaga Nasional Bhd | 1.9% |
| TransAlta Corp | 1.2% |
| Origin Energy Ltd | 1.1% |
| American Electric Power Company Inc | 1.0% |
| Holding Name | Contribution to Sector Production |
|---|---|
| General Motors Co | 34.7% |
| Ford Motor Co | 32.2% |
| Mercedes-Benz Group AG | 11.6% |
| Stellantis NV | 10.4% |
| Subaru Corp | 10.4% |
| Kia Corp | 0.7% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Alamtri Resources Indonesia Tbk PT | 88.9% |
| Inner Mongolia Yitai Coal Co Ltd | 11.1% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Civitas Resources Inc | 50.1% |
| Canadian Natural Resources Ltd | 17.1% |
| Parex Resources Inc | 8.2% |
| Equinor ASA | 5.5% |
| EOG Resources Inc | 5.1% |
| Suncor Energy Inc | 4.0% |
| PetroChina Co Ltd | 3.0% |
| Eni SpA | 2.7% |
| Petroleo Brasileiro SA Petrobras | 1.5% |
| Idemitsu Kosan Co Ltd | 1.0% |
The Royal Bank of Canada (RBC) Global Asset Management appears to be engaging with companies around climate change. The asset manager has a strategy for climate engagements that focuses on climate disclosures as well as emissions reduction targets and action plans. It does not appear to use defined milestones to measure engagement progress but states it is working towards a systematic engagement tracking system. The asset manager employs three main escalation methods, which are private dialogue, public statements, and proxy voting.
RBC GAM is engaging companies on climate, for example it engaged with an optical lens manufacturer on climate disclosures and emissions reduction plans, and its engagements with an energy infrastructure company led the company to develop interim carbon intensity targets. It updated it voting guidelines, stating it supports disclosure of climate lobbying and alignment of lobbying with climate initiatives, but does not provide examples of engagements on this topic. The asset manager is involved with several collaborative investor initiatives and has participated in collaborative engagements with CA100+.
RBC GAM has clearly described its stewardship governance and review processes, and appears to regularly communicate with clients to reflect their views in its stewardship approach. The asset manager only provides anonymous case studies in its reporting, however it has disclosed all proxy voting data including voting rationale for votes against management.
RBC GAM states that it is willing to use shareholder authority but has not provided evidence of filing climate-related shareholder resolutions.
Insightia data suggests that RBC has mixed support of AGM resolutions InfluenceMap categorizes as in line with the Paris Agreement, supporting 51.3% in 2019, 55.8% in 2020, 51.2% in 2021, and decreasing in 2022 at 28.1%.
FinanceMap's methodology to measure the engagement process on climate was developed in consultation with several of the world's leading asset managers and uses key aspects of the UK Financial Reporting Council's 2020 Stewardship Code . The Stewardship Code was chosen to benchmark engagement quality as it provides an ambitious framework and detailed definitions of what constitutes effective engagement. FinanceMap defines the term ‘engagement’ as referring to all investor actions undertaken to influence the management strategy of the companies they own including private communications with corporate management and appointed advisors; questions at AGMs/other company meetings; comments on the company in the media; escalation and the shareholder resolution process (filing, voting behavior). FinanceMap’s methodology breaks the engagement process down into a set of sub-activities and looks for evidence associated with these across publicly available data sources.
Climate-relevance categorization of shareholder resolutions is based on the IPCC’s Special Report on 1.5°C and its concluded need for “rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities.” FinanceMap scored voting on any resolution where the intent and likely outcome is consistent with this IPCC stated need. The voting data is drawn from asset managers' disclosures to the US Security Exchange Commission (SEC), asset manager websites (including third-party websites they link to), directly from the asset managers, and through specialist voting data provider Insightia. The full list of resolutions assessed is available here.
The following table outlines the key queries and data sources, which FinanceMap uses to assess asset managers' corporate engagement programs. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Climate Lobbying Overview: The Royal Bank of Canada (RBC) and its subsidiary RBC Global Asset Management (GAM) appear to be somewhat supportive of climate-related finance policy, real economy policy, and the energy transition. Details of direct engagement on climate-related financial regulation are often unclear, and the bulk of RBC’s position-taking on non-financial policy and the energy transition comes from Thought Leadership articles rather than from evidence of direct policymaker communications.
Top-Line Messaging on Climate-Related Financial Policy: In a 2022 ESG Report from RBC’s European Equity Team, short-termism is identified as a market weakness. RBC Climate Action Institute supported urgent action to combat climate change in its Climate Action 2024 Report, and RBC GAM has supported action to limit temperature rise to 1.5C in its 2023 Approach to Climate Change document. Across 2022 and 2023 ESG and Climate Reports RBC and RBC GAM have disclosed engagement with policymakers on climate-related finance issues, but details of this engagement are unclear.
Position on Regulated Corporate Climate Disclosure: In RBC’s 2023 Climate Report it disclosed engaging on climate disclosure requirements across different jurisdictions, but provided no details of this engagement, including on which specific policies it is engaged. In its 2023 ESG Progress Report RBC reports engagement on the SEC climate disclosure rule but gives no position on the policy. Canadian lobbying reports from 2024 show that RBC has engaged on Canadian climate disclosure policy, but with no details of position. In 2023, RBC GAM signed onto the COP28 Declaration of Support for ISSB Reporting Standards, committing to advance the adoption of the Standard as the climate disclosure global baseline.
Position on Taxonomies: RBC participated in Canada’s Sustainable Finance Action Council, a group tasked with drafting recommendations for a Canadian taxonomy. On RBC’s website in 2023 it supported work to develop a taxonomy for “transition finance,” and in its 2023 ESG Progress Report RBC supported the need for a taxonomy in order to decarbonize hard-to-abate sectors. In a 2023 Thought Leadership article, RBC called for any Canadian taxonomy to include “flexibility” for liquified natural gas (LNG) assets, where tied to verified emissions reductions. In 2024 testimony to the House of Commons Standing Committee on Environment and Sustainable Development, CEO David McKay supported the need for a taxonomy and the role of the government in crafting it.
Position on Incorporating Climate Factors into Risk Management/Prudential Regulation: According to RBC’s 2023 ESG Progress Report, 2023 Statement on Lobbying and Political Contributions, and 2023 US Federal Lobbying Disclosure, it has engaged with US financial regulators on proposed climate risk management principles and guidance for banks. Details of this engagement, across reporting, are unclear.
Position on Real Economy Climate Policy: In RBC Climate Action Institute’s Climate Action 2024 Report it stated support for Canada’s methane regulation for the oil and gas sector, and in a 2023 Thought Leadership article RBC called for governments to set clearer emissions reduction targets for the gas and LNG industry. Also in the Climate Action 2024 Report RBC Climate Institute supported waste management policies including British Columbia’s Extended Producer Responsibility fees. Across other Thought Leadership articles from 2023 and 2024 RBC has supported energy efficiency policies and funding in Canada’s 2024 Budget, emissions trading systems in Canada, and carbon border adjustment mechanisms to cut emissions.
Position on Energy, Industry, and Land Transitions: RBC appears generally supportive of the transition of the energy mix, although supporting a continued role for fossil gas in the mix without clear conditions around CCS. In its 2023 ESG Progress Report RBC broadly supported decarbonization of the economy, calling for government action to address hard-to-abate sectors and accelerate “critical enablers” for decarbonizing buildings and electrifying the power sector. In the Climate Action 2024 Report RBC Climate Action Institute supported government action to develop electric vehicle infrastructure, increase wind energy in the energy mix, and support low-carbon hydrogen production. In 2023 and 2024 Thought Leadership pieces RBC stated support for Canada’s renewable energy tax credits and advocated for increased government investment in renewables. In a 2024 article on AI and Canada’s grid RBC appeared to support a continued role for fossil gas with CCS in the power sector, but with some ambiguity around conditions and timelines for ensuring CCS deployment. In a 2023 article, RBC supported a role for fossil gas in the energy mix on the basis that it is “cleaner” without clear conditions related to CCS or methane mitigation, and appeared supportive of infrastructure to lock in LNG in the energy mix.
In 2022 testimony to the Canada’s Senate Committee on Banking, Trade and Commerce RBC Senior Vice President John Stackhouse supported the decarbonization of the economy and electrification of transport. In 2023 testimony to Canada’s Standing Senate Committee on Agriculture and Forestry RBC’s Mohamed Yaghi called for regulators to standardize measurement reporting verification for soil offsets, generally supporting policy for protecting and enhancing carbon sinks and reservoirs.
Industry Association Governance: RBC and RBC GAM have disclosed a partial list of industry association memberships but appear to exclude some groups active on climate-related policy including the Institute of International Finance and Canadian Manufacturers & Exporters. Additionally, details of groups' climate-related policy engagement are omitted or limited to top-line details.
InfluenceMap collects and assesses evidence of corporate climate policy engagement on a weekly basis, depending on the availability of information from each specific data source (for more information see our methodology). While this analysis flows through to the company’s scores each week, the summary above is updated periodically. This summary was last updated in Q4 2024.
InfluenceMap’s methodology for assessing lobbying on climate finance policy closely follows InfluenceMap’s established methodology on climate policy engagement, which is used extensively by investors, including via the Climate Action 100+ investor engagement process. Our full methodology can be found here.
Under our lobbying assessment, InfluenceMap considers engagement on all financial policies which intersect with climate issues, as well as “real economy” climate change policies.
The analysis takes into account both the engagement of the financial institution and the activities of industry associations they hold membership of. InfluenceMap’s methodology covers seven publicly available data sources, searching for evidence of engagement and corporate positioning since 2017. To determine the policy issues within the scope of the analysis, InfluenceMap breaks down policy engagement into a series of subcategories, or 'queries'. These are designed to cover high-level issues relating to the importance of sustainable finance, as well as more specific areas of sustainable finance policymaking. InfluenceMap’s research process searches for evidence of an organization's engagement with each policy issue, across each of the data sources.
The following table outlines the key queries and data sources, which InfluenceMap uses to assess financial institutions' policy engagement. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
In this section, we depict graphically the relationships the corporation has with trade associations, federations, advocacy groups and other third parties who may be acting on their behalf to influence climate change policy. Each of the columns above represents one relationship the corporation appears to have with such a third party.
In these columns, the top, dark section represents the strength of the relationship the corporation has with the influencer. For example if a corporation's senior executive also held a key role in the trade association, we would deem this to be a strong relationship and it would be on the far left of the chart above, with the weaker ones to the right. Click on these grey shaded upper sections for details of these relationships. The middle section contains a link to the organization score details of the influencer concerned, so you can see the details of its climate change policy influence. Click on the middle sections for for details of the trade associations. The lower section contains the organization score of that influencer, the lower the more negatively it is influencing climate policy.
