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 approach to climate change and the management of climate-related risks and opportunities. In 2022, the board approved the RBC Climate Blueprint, and monitored progress towards the organization’s net-zero commitment. Additionally, senior management are assigned clear 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 over different time horizons. 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 climate-related risks and opportunities with the potential to have a substantive financial or strategic impact on the business. It has provided numerous examples of how it has considered the impact of climate-related risks and opportunities on its corporate strategy planning in its reporting.
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. Additionally, it has disclosed some implications of its scenario analysis on its strategy and business model, but has not described any plans to respond to the impacts identified.
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 2022 Climate Report. The organization states that it has developed capabilities for assessing transition risk at the client level in 2022.
The organization highlights some processes in place to manage climate-related risks, such as its Environmental and Social Risk Management policy. RBC is transparent about how products or investment strategies might be affected by the transition to a lower-carbon economy and provides 791029 some examples of action taken to mitigate these effects.
RBC has integrated climate-related risks into overall risk management through both a qualitative statement and in quantitative measures, and also updated its Environmental and Social Risk policy in 2022 to include enhanced climate objectives.
RBC discloses some 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 three sectors, oil and gas, power generation, and automotive, and is working to improve the data quality of its measurements using the PCAF reporting standard.
In February 2021, RBC announced an updated sustainable financing target and a Net Zero lending 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 mining 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 included either sector in its policy guidelines for sensitive sectors and activities. It names the Arctic and ANWR in this policy, and states that resource and energy development activities in these areas require enhanced due diligence. Otherwise, the organization appears to be actively financing new or expansionary projects.
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 2020–2022.
Value Assessed: $234B
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 2020–2022.
Value Assessed: $187B
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: $4.4B
| Holding Name | Contribution to Sector Production |
|---|---|
| Orsted A/S | 21.4% |
| Brazilian Electric Power Co | 21.3% |
| Capital Power Corp | 19.2% |
| Algonquin Power & Utilities Corp | 7.4% |
| RWE AG | 5.5% |
| Engie SA | 3.8% |
| Consolidated Edison Inc | 3.5% |
| Energy of Minas Gerais Co | 2.6% |
| EDP Energias de Portugal SA | 2.2% |
| TransAlta Renewables Inc | 2.1% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Mahindra and Mahindra Ltd | 70.0% |
| Stellantis NV | 7.8% |
| Hyundai Motor Co | 4.7% |
| Mazda Motor Corp | 4.5% |
| Ford Motor Co | 2.7% |
| Dongfeng Motor Group Co Ltd | 2.3% |
| Bayerische Motoren Werke AG | 1.9% |
| Subaru Corp | 1.6% |
| Mercedes Benz Group AG | 1.3% |
| Honda Motor Co Ltd | 1.0% |
| Holding Name | Contribution to Sector Production |
|---|---|
| CONSOL Energy Inc | 51.8% |
| Warrior Met Coal Inc | 23.7% |
| China Shenhua Energy Co Ltd | 9.1% |
| Exxaro Resources Ltd | 6.2% |
| Adaro Energy Indonesia TBK PT | 5.4% |
| Coal India Ltd | 2.3% |
| Inner Mongolia Yitai Coal Co Ltd | 0.9% |
| United Tractors Tbk PT | 0.6% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Equinor ASA | 25.3% |
| PDC Energy Inc | 10.7% |
| EOG Resources Inc | 7.1% |
| Canadian Natural Resources Ltd | 7.1% |
| Magnolia Oil & Gas Corp | 6.8% |
| National Fuel Gas Co | 4.4% |
| Suncor Energy Inc | 3.9% |
| ARC Resources Ltd | 3.3% |
| Peyto Exploration & Development Corp | 3.0% |
| Conocophillips | 3.0% |
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.
Royal Bank of Canada (RBC) appears to have taken somewhat positive positions on sustainable finance policy, although details of its engagement with many policies remain unclear.
RBC has recognized the issue of short-termism and stated support for some regulatory action to incentivize longer term investments, but generally appears to support an ad-hoc approach to addressing flaws in the financial system instead of systemic reforms. RBC’s Global Asset Management (GAM) arm, in its 2023 Approach to Climate Change report, stated support for limiting temperature rise to 1.5C. In October 2021, RBC joined the Glasgow Financial Alliance for Net Zero's banking arm, the Net-Zero Banking Alliance, signaling a commitment to the goal of net-zero emissions by 2050. In a 2021 opinion piece, CEO David McKay encouraged Canada to increase its ambition in tackling climate change, but in an interview in 2020, McKay appeared to support continued investment in the fossil fuel sector. Additionally, a letter submitted to the Municipal Advisory Council of Texas in September 2022 shows evidence of RBC’s continued support for investing in fossil fuels. Across their 2022 ESG and Climate Reports RBC and RBC GAM have disclosed engagement with policymakers on sustainable finance issues, but details of this engagement are unclear.
RBC has outlined some positive positions on regulated corporate ESG disclosure. In its 2021 CDP response, RBC appears to support mandatory ESG disclosure in line with the TCFD. In its 2022 CDP response, though, RBC took a more mixed position on the US Securities and Exchange Commission’s (SEC) efforts to regulate climate disclosure, stating it supported the policy “with minor exceptions.” However, in its 2021 Corporate Governance and Responsible Investment (CGRI) report, RBC stated that, through industry associations, it had supported the SEC’s efforts to enhance climate-related financial disclosures and a RBC Capital Markets article from March 2022 appears supportive of the SEC’s proposed climate disclosure rule, saying it will provide “much-needed clarity.”
In its 2021 UK Stewardship Code Report, RBC GAM mentioned engaging with the Canadian Securities Administrators’ proposed guidance on ESG-related investment fund disclosures and the Government of Canada’s green bond framework, but details of these engagements are unclear. In a 2021 insights paper RBC advocated for a transition taxonomy for Canada that would allow investments in fossil fuels to be labeled “green” so that emissions-intensive sectors could access capital needed to make the transition to a low-carbon economy.
In feedback to the US Department of Labor in 2020, RBC strongly opposed two rollbacks that sought to limit fiduciaries' ESG investing and voting around ESG issues. In its 2021 CGRI report RBC mentioned engaging with proposed guidance on ESG-related investment fund disclosures in Canada but details of this engagement are unclear. RBC also described engaging with the EU Sustainable Finance Disclosure Regulation (SFDR) but details of this engagement are unclear.
In a 2021 insights paper, RBC outlined current financial regulatory efforts to incorporate climate risk into stress tests and capital requirements, but it is unclear whether it supports these efforts. In January 2022 RBC joined a consortium that is engaging with banking regulators and policymakers on climate risk policies, but details of this engagement are unclear. In RBC’s March 2023 Statement on Lobbying and Political Contributions RBC discloses direct and indirect engagement on climate risk regulations with US banking regulators, but details of this engagement are unclear.
RBC has published a partial account of its industry associations’ positions on and engagement with specific sustainable finance policies, however, does not provide an account for some groups that are actively engaged on sustainable finance policy including the Bank Policy Institute (where CEO David McKay sits on the Board) and SIFMA.
InfluenceMap’s methodology for assessing lobbying on sustainable 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 assessment of sustainable finance lobbying, InfluenceMap considers engagement on all financial policies which intersect with climate and/or other sustainability issues. 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 sustainable finance 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 sustainable finance policy issue, across each of the data sources.
The following table outlines the key queries and data sources, which FinanceMap uses to assess financial institutions’ sustainable finance 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.
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
David McKay is a board member of the IIF
David McKay (President & CEO, Royal Bank of Canada)
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Royal Bank of Canada is a Member of the IIF
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
David McKay is a board member of the IIF
David McKay (President & CEO, Royal Bank of Canada)
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Royal Bank of Canada is a Member of the IIF
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Ryan Taylor is on the board of SIFMA
Ryan Taylor (Managing Director, U.S. Head of Capital Markets Compliance RBC Capital Markets)
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
RBC is a member of SIFMA.
not specified
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Ryan Taylor is on the board of SIFMA
Ryan Taylor (Managing Director, U.S. Head of Capital Markets Compliance RBC Capital Markets)
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
RBC is a member of SIFMA.
not specified
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sian Hurrell is on the board of directors for ISDA. (Last checked November 2023)
Sian Hurrell (Global Head of Sales and Relationship Management and Head of Global Markets Europe - RBC Capital Markets)
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Royal Bank of Canada is a member of ISDA.
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sian Hurrell is on the board of directors for ISDA. (Last checked November 2023)
Sian Hurrell (Global Head of Sales and Relationship Management and Head of Global Markets Europe - RBC Capital Markets)
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Royal Bank of Canada is a member of ISDA.
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
RBC GAM is a member of the Investment Association (last checked September 2023).
not specified
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
RBC GAM is a member of the Investment Association (last checked September 2023).
not specified
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
RBC is a member of UK Finance, which is a member of the EBF (last checked September 2023).
not specified
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
RBC is a member of UK Finance, which is a member of the EBF (last checked September 2023).
not specified
--no extract--
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