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Royal Bank of Canada on the defensive over criticism of fossil fuel financing

Accused of being Canada’s biggest financial backer of fossil fuel projects, the bank is feeling the heat — even if it doesn’t say that publicly

This spring, Jocey Alec, a Wet’suwet’en land defender and daughter of Dinï ze’ (Hereditary Chief) Woos, travelled to Toronto to voice concerns to leaders of Canada’s largest bank, which financed a pipeline running directly through her territory.

She was allowed to speak for 11 seconds.

It was three years after armed police raided Wet’suwet’en territory, enforcing a court-ordered civil injunction against anyone impeding construction of the pipeline, called Coastal GasLink, which will carry fossil fuels from northeast British Columbia across Indigenous territories to the coast.

The pipeline was made possible with the help of Royal Bank of Canada (RBC), which acted as the “exclusive financial advisor” to TC Energy, the company behind the pipeline’s construction. As “global lead coordinating arranger,” the bank also helped arrange loans for project construction financing.

Wet’suwet’en Hereditary Chiefs fiercely opposed Coastal GasLink running through their unceded territory without their consent, while at the same time, five of six elected Wet’suwet’en band councils supported the project and signed agreements with the pipeline company and the B.C. government. The pipeline’s construction was finished last winter. 

A crowd of police, including militarized police wait in the courtyard outside of a tiny house dwelling as supporters are arrested at Coyote Camp in Gidimt’en territory near Houston, BC on Friday, November 19, 2021.The
In 2019, police raided Wet’suwet’en territory to enforce a court-ordered civil injunction against anyone impeding construction of the Coastal GasLink pipeline. Wet’suwet’en land defender Jocey Alec travelled to Toronto this spring to voice concerns about Royal Bank’s financing of the pipeline. Photo: Amber Bracken / The Narwhal

TC Energy says the project created more than 25,700 full-time equivalent jobs in B.C. and contributed $3.2 billion to the province’s gross domestic product, among other benefits. But the company has also faced multiple fines for breaking environmental rules, and a report by Amnesty International condemned the “years-long campaign of violence, harassment, discrimination and dispossession” against Wet’suwet’en land defenders at the hands of law enforcement and the fossil fuel industry.

Alec had already tried talking to the bank’s executives about the mistreatment of her community; she travelled to Saskatoon in 2023 to speak at another Royal Bank shareholder meeting. There, she was stopped by security, threatened with arrest and separated from the main group of demonstrators, she said. 

This year, on a dreary, rainy April day, she was determined to get her message across to Royal Bank leadership gathered at the Toronto Congress Centre, a sprawling set of low-slung convention halls in the suburbs near Pearson airport. 

“My name is Jocey, I am a Wet’suwet’en land defender,” Alec began when it was her turn to speak. “Proposal number 7 speaks to holding an annual vote on RBC’s climate plans,” she continued, referring to one of the shareholder proposals up for debate. 

“Meanwhile, RBC continues to ignore and violate the voices of those —” 

Suddenly, 11 seconds in, she was cut off by the chair of the bank’s board, Jacynthe Côté, who told Alec her questions needed to focus on the agenda item at hand — in that moment, nominees for the bank’s board of directors. 

“I’m sorry, is your question around the election of directors?” Côté interjected.

Alec pressed on. “I’m here to share my experience directly from the RBC-funded Coastal GasLink pipeline,” she said. “I’ve been ripped off my territory —”

Côté interrupted again. “As your question is not about the election of directors, I will need to move to the next question. Thank you for joining us.” 

Speaking to The Narwhal and The Local over the phone after the event, Alec said the moment had revealed how the leadership of Royal Bank was in denial.

“I was describing my experience once again, but then they just ended up shutting me down,” she said. 

“I feel like they do get the message, but they just don’t want to acknowledge their complicity on what they’re funding.” 

A green banner reading "The Green* Economy, a collaboration between The Narwhal and The Local"
Illustration: Shawn Parkinson / The Narwhal

This year, Royal Bank was declared the top financier of fossil fuels among Canada’s big five banks by the 2024 Banking on Climate Chaos report, a joint effort by organizations including the Rainforest Action Network, BankTrack, Oil Change International and the Sierra Club. The report said it had provided fossil projects in Canada and beyond with US$256 billion since 2016, US$28 billion of that in 2023.

And according to Bloomberg Terminal data compiled by environmental nonprofit Stand.earth, as of March 2022 Royal Bank had helped co-finance a loan for Coastal GasLink worth $6.5 billion. Stand.earth said the bank had additionally provided a $40 million corporate loan, $275 million in other types of financing and $200 million in co-financed working capital for the project.

The Narwhal and The Local asked Royal Bank and TC Energy if they disputed the financial figures compiled by Stand.earth. Neither addressed the dollar amount, and both said the project had, in TC Energy’s words, “the support of all 20 out of 20 elected Indigenous groups.” 

“RBC is one of 26 lenders to the project,” bank spokesperson Andrew Block said in an emailed response to questions from The Narwhal and The Local. “We have made a commitment to it as a financer and we have an obligation to honour that commitment. There are many individuals and organizations, including Indigenous ones, involved in this project and relying on its completion.”

Block also wrote that Royal Bank respects “there are differing opinions within Indigenous communities and as we’ve sought input from many members, they’ve told us that these differences are best resolved within their own communities.”

“We fully understand the imperative for climate action and are supporting our clients in accelerating their efforts in the transition to a greener economy, including exploring growth opportunities in low-carbon energy,” he wrote.

There are faint signs, however, that Royal Bank may be finally starting to feel the heat on climate.

Protestors wait outside Royal Bank of Canada's shareholder meeting in April 2024.
Demonstrators gathered outside the Toronto Congress Centre in April, during Royal Bank’s annual meeting. Speakers inside said they weren’t given enough time to express their concerns. Photo: Carrie Davis / The Narwhal / The Local

After pressure from New York City, RBC agrees to fuller disclosure

Regardless of the specific financial relationships it enters into, it is Royal Bank’s steady focus on fossil fuels that continues to bring criticism upon Canada’s largest bank.

The bank’s capital markets arm published a research note this month titled Quality on Sale, Act Now. A version of the note that appeared in The Globe and Mail describes the oilsands industry as “the most attractive we have seen in over a decade” in terms of investment. It also suggests some oil and gas stocks are undervalued, and makes no mention of the risk of stranded assets in a low-carbon economy.

Royal Bank said a longer version of the note includes a reference to climate and emissions, but that version is behind a registration wall on its website and not easily accessible to the general public.

The bank, which has nearly 100,000 employees and operates in 29 countries, is now worth approximately $193 billion, fresh off a $13 billion takeover of HSBC Canada. And it’s pulling in gobs of money, including the $15 billion in profits it earned over the year ending October 2023.

But in the run-up to the annual meeting, the bank made some moves that surprised analysts. 

One involved an 11th-hour reversal on disclosure. In a document circulated to shareholders before its meeting, the bank recommended they vote against a resolution proposed by New York City comptroller Brad Lander, whose job requires ensuring investments made by the city’s public pension funds are secure.

Lander wanted the bank to show, in the form of a ratio, its financial ties with fossil fuel projects compared to clean energy sources. The comptroller, acting on behalf of multiple New York City retirement systems, was worried pensioners’ investment portfolios were “at risk” from over US$1 trillion in fossil fuel financing provided by U.S. and Canadian banks since the Paris Agreement on climate change. The fear was these investments could become seriously devalued stranded assets as demand for and production of fossil-free energy grows. 

A Royal Bank of Canada logo seen on a downtown Toronto building.
Royal Bank has nearly 100,000 employees and operates in 29 countries. It is worth approximately $193 billion and made $15 billion in profits in the year ending October 2023. Photo: Carrie Davis / The Narwhal / The Local

When Lander first asked for the ratio, Royal Bank said it would be “premature” to publicly reveal this information, which would not provide any “meaningful additional insights” anyway. But about a week before the April meeting, the bank agreed to disclose this ratio, which it told The Narwhal and The Local it will publish in its next climate report. 

Matt Price, executive director at Investors for Paris Compliance, a Canadian shareholder advocacy group, called that reversal a significant moment.

“Shareholder campaigns — particularly when New York City got involved — added to the pressure on RBC to take some initial steps on climate,” Price, whose group also studies corporations’ net-zero promises, told The Narwhal and The Local. 

“But we wouldn’t be seeing that without the focus on the bank from Indigenous groups, due to its financing of fossil fuel expansion projects in their territories.”

In March, Royal Bank added questions about impacts to Indigenous lands and communities to its risk-assessment process. Last year, it updated its human rights statement, which says it respects “the inherent right of Indigenous Peoples to self-determination in accordance with international and domestic law,” and says the bank is working with Indigenous Peoples “to better understand approaches to operationalizing the principle of free, prior and informed consent.”

Maya Menezes, senior climate finance organizer with Stand.earth, said both the ratio disclosure and the decision to acknowledge Indigenous Rights in its policies are significant shifts for Royal Bank. 

“So there is movement, and that’s important. And it’s only because of the herculean organizing efforts led by Indigenous peoples and allies across the country — mostly young people,” she said.

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There have been other signs Royal Bank is on the defensive. 

Last summer, the bank posted a job for a “head of climate transition,” where the position would in part “anticipate and manage RBC’s reputation related to climate transition activities and proactively mitigate any risk in this area,” and “develop and implement effective and lasting responses to climate activism.”

In November, Royal Bank made its first public commitment to “being prepared to step away” if one of its clients repeatedly “does not demonstrate sufficient planning for the energy transition.” It’s part of a new formal approach to assessing the transition plans of its oil and gas clients as well as those in the power generation business.

Royal Bank says it is the first major Canadian bank to commit to this type of formal approach, which has been key to singling out “opportunities and areas of focus” to help its clients slash greenhouse gas emissions. 

Mark Kalegha, who studies the oil and gas industry in Canada as an energy finance analyst at the U.S.-based Institute for Energy Economics and Financial Analysis, told The Narwhal and The Local the bank hasn’t given enough information about how this policy would work in practice. 

Financial institutions should be using “consistent and transparent criteria” to communicate net-zero transition plans and policies to clients, according to a report from the Glasgow Financial Alliance for Net Zero, which includes Royal Bank through its membership in the Net Zero Banking Alliance.

“Sometimes you have to wield the big stick, so to speak, saying, ‘You don’t comply, and we have targets that we have to meet, so if you’re not aligned with us, we can’t continue to do business with you,’ ” said Kalegha.

That’s not the bank’s only climate commitment that could use a little backbone. On carbon pollution, Royal Bank has pledged to “achieve net-zero in our lending by 2050” — eliminating or offsetting emissions it finances through investments and loans — but this target does not include emissions from other activities, like underwriting, where the bank takes on financial risk for a fee. The bank says it is considering standards for those kinds of emissions.

It has also set interim targets for 2030, such as a 35 per cent reduction of oil and gas emissions from 2019 levels. But that covers so-called emissions intensity, or how much pollution is generated per unit of energy, which can allow for increased overall emissions if more energy is produced. Royal Bank has defended its choice of an emissions intensity goal in its Net-Zero Report, saying that metric has better “stability” and “comparability” between clients. 

Royal Bank acted as the “exclusive financial advisor” to TC Energy, the company behind the Coastal GasLink pipeline. Wet’suwet’en Hereditary Chiefs fiercely opposed the project, while 17 First Nations in the region signed equity agreements with TC Energy. Photo: Matt Simmons / The Narwhal 

Discontent with Royal Bank’s fossil fuel ties goes beyond Coastal GasLink pipeline

At the bank’s annual meeting, Royal Bank’s president and CEO, Dave McKay, told the crowd the bank decides which projects to support by conducting “a very detailed risk assessment” that includes ensuring regulatory compliance and evaluating each project “on its own merits, its own independence.” 

“We feel confident that this framework allows us to decide which projects deserve our support and which don’t,” he said. In an email this month, the bank added it “considers climate impacts and human rights impacts, including on the rights of Indigenous peoples. Before financing a project, RBC conducts due diligence to assess whether environmental and social issues associated with the project have been adequately considered and minimized, mitigated or offset.”

When it came to Coastal GasLink, McKay signaled he had balanced opposition from Wet’suwet’en Hereditary Chiefs against what he saw as support for the pipeline, in the form of equity agreements that TC Energy signed with two coalitions representing elected First Nations governments.

A spokesperson for TC Energy told The Narwhal and The Local that 17 First Nations in the region were now represented in the equity agreements, which have provided a shared 10 per cent ownership stake. That’s compared with 20 Indigenous groups that the company claims broad support from.

McKay raised the statistic in his remarks during the meeting.

“Those are signals that we look for — who’s participating, who is supporting,” he said. “You see very strong economic participation from the vast majority of those First Nations.”

Block, spokesperson for Royal Bank, told The Narwhal and The Local Coastal GasLink was “extensively reviewed and approved by the appropriate regulatory and government bodies and the subject of court rulings.” While the 2019 B.C. Supreme Court injunction forbade interference with pipeline construction, it did not fully resolve the deeper conflicts between Indigenous and Canadian legal systems. Block did not clarify what he meant by court rulings.

While the level of Indigenous criticism at the April meeting was notable, it wasn’t unanimous. Chief Councillor Sharleen Gale, of Fort Nelson First Nation in B.C., said financial support for resource extraction and energy projects in which First Nations have equity stakes is essential to Indigenous economic stability. 

Gale is chair of the First Nations Major Projects Coalition, which says it represents over 160 First Nations across Canada.

“We need our financial backers like RBC to support our nations in taking equity positions in these projects,” Gale said at the meeting. She said she was “grateful” to Royal Bank for being the title sponsor of the coalition’s April conference.

The conference website also listed TC Energy as a sponsor, as well as Enbridge, Cenovus, Chevron, Petronas, Suncor and two influential oil and gas lobby groups, the Pathways Alliance and the Canadian Association of Petroleum Producers

McKay commended Gale for her “incredible work” on behalf of communities and said the coalition was “instrumental” in bringing together investment capital. “True reconciliation has to be found by economic inclusiveness,” he said. “I think a big part of achieving free, prior and informed consent is allowing economic participation in those journeys.” 

‘I don’t feel, as an Indigenous person, I was respected when I came here to RBC’

Royal Bank’s fossil fuel financing has become international news, covered by Bloomberg, the Financial Times and Al Jazeera. Last year, Hollywood celebrities including Mark Ruffalo, who had already accused the bank of “fueling the climate crisis and violating Indigenous rights” on his Instagram account, joined with Canadian filmmakers to ask the Toronto International Film Festival to end a sponsorship deal with Royal Bank due to its financial ties to the oil and gas industry. 

Canada’s federal Competition Bureau is also probing the bank’s marketing of its Climate Blueprint for evidence that the bank made “false or misleading environmental representations.” (The bank has said it strongly disagrees with the allegations and believes them to be unfounded.)

Speakers that showed up to the April annual meeting in Toronto shared complaints about a variety of oil and gas industry projects to which the bank is allegedly financially linked.

The bank said this meeting was designed in response to complaints about previous gatherings. Côté explained the suburban conference centre was chosen because last year’s space wasn’t big enough. She said a short speaking time was meant to “give more chances to a broader group to be able to ask questions.” 

But several speakers weren’t given the time to get everything they wanted to say off their chests, including some who had travelled from the U.S. 

Crystal Cavalier-Keck at a press conference after Royal Bank of Canada's shareholder meeting in April 2024.
Crystal Cavalier-Keck, from the Occaneechi Band of the Saponi Nation, travelled from North Carolina to raise awareness of Royal Bank’s financial ties to an investor in the Mountain Valley Pipeline, which would carry methane-heavy natural gas through the Appalachian Mountains. Photo: Carrie Davis / The Narwhal / The Local

Crystal Cavalier-Keck, from the Occaneechi Band of the Saponi Nation, travelled from North Carolina as part of a 10-year fight against the the Mountain Valley Pipeline, which would carry methane-heavy natural gas through the Appalachian Mountains. 

Royal Bank has been an underwriter for a US$27 million bond issuance to one of Mountain Valley’s investors, according to BankTrack, which scrutinizes projects supported by private sector commercial banks.

Cavalier-Keck argued a proposed pipeline extension would violate Indigenous Rights, destroy sacred lands and burial grounds and harm endangered species. Requests for comment sent to Mountain Valley Pipeline were not returned before publication.

“Your auditors look at risk. Do you understand the very serious reputational and financial risks RBC faces in helping finance the Mountain Valley Pipeline?” Cavalier-Keck asked.

Côté interrupted Cavalier-Keck to ask, “Do you have a question regarding the election of the auditor?” 

“Will you truly respect Indigenous Rights —” Cavalier-Keck started, before Côté thanked her for her question and got back to the agenda.  

At the post-meeting press conference, Cavalier-Keck said she didn’t know “whether to be sad, mad, angry.” 

“I don’t feel, as an Indigenous person, I was respected when I came here to RBC,” she said.

Asked for comment, Block, the bank spokesperson, wrote RBC “follows a financial industry benchmark for identifying, assessing, managing and mitigating environmental and social risks in project finance-related projects, which considers climate impacts and human rights impacts, including on the rights of Indigenous Peoples.” 

“Before financing a project, RBC conducts due diligence to assess whether environmental and social issues associated with the project have been adequately considered and minimized, mitigated or offset,” he wrote.

University of Waterloo student Celine Isimbi at a press conference after Royal Bank of Canada's shareholder meeting in April 2024.
Celine Isimbi, a University of Waterloo student and organizer at the youth-led nonprofit Change Course, called Royal Bank’s donation to the university “greenwashing.” The bank says it supports “climate education in Canada.” Photo: Carrie Davis / The Narwhal / The Local

Another speaker, Celine Isimbi, also warned the bank about its reputation. The University of Waterloo student is an organizer at the youth-led nonprofit Change Course, which leads a campaign to kick Royal Bank off Canada’s university campuses

Isimbi brushed off the bank’s $2 million donation to the University of Waterloo’s sustainable financial management program, saying “students at all campuses are noticing this greenwashing.”

“You will not be surprised to know that we have a very different perspective and believe supporting climate education in Canada is a positive thing to do,” Block responded, when asked about Isimbi’s comments.

“We believe as a large corporate citizen in Canada and globally, that we have a responsibility to support the communities in which we operate. Supporting the transition to a greener economy and skills development are two areas where RBC is directing its efforts.”

As for the welcome given to critics, Indigenous and otherwise, the bank said all attendees were given the same time allotment. 

“RBC’s board chair and CEO responded respectfully and thoughtfully to multiple questions about climate and Indigenous Rights including from a number of Indigenous participants,” Block wrote.

“Further, the bank had multiple executives and subject matter experts available before, during and after the [meeting] who connected directly with those in attendance onsite.”

‘We don’t have all the ideas,’ Royal Bank CEO says

At the annual meeting, CEO McKay argued the bank is not dragging its feet on tackling climate change — in fact, he felt it is taking “a leadership role.”

In March, the bank announced three new commitments it argued would “help accelerate the transition to a greener economy.” They were included as part of the release of the bank’s 2023 Climate Report

The first is a goal of tripling Royal Bank’s lending to renewable energy projects to $15 billion and growing its “low-carbon energy lending” to $35 billion by 2030. The bank also committed to allocating $1 billion for supporting “the development and scaling of innovative climate solutions” by 2030. 

And it committed to getting more money out the door to emissions reduction efforts by creating a new “decarbonization finance” category as part of its 2024 Sustainable Finance Framework.

At the same time, Royal Bank is not rushing to abandon fossil fuel clients anytime soon. 

A Royal Bank of Canada logo seen on a downtown Toronto building.
After pressure from New York City, Royal Bank agreed to disclose the ratio of its financial ties with fossil fuel projects compared to clean energy sources. The decision was hailed as a significant moment by a Canadian shareholder advocacy group. Photo: Carrie Davis / The Narwhal / The Local

In its Client Engagement Approach on Climate, the document where it pledged to walk away from clients that refuse to plan for a low-carbon future, the bank said it still believed “energy companies can help build the low-carbon energy system of the future while being at the heart of efforts to reduce emissions from conventional sources of energy today.” 

When asked by The Narwhal and The Local about criticism that this approach isn’t clear or urgent enough, Block said Royal Bank is “still in the early phases of the implementation of the client engagement approach” and, at this time, the bank is “focused on working with our capital markets energy clients to help advance their transition plans” over the long term.

“We don’t have all the ideas,” and some of Royal Bank’s ideas “may or may not work,” McKay said at the meeting.

He said he agreed the bank needed to continue to “evolve” its strategy for the energy sector. But he said he thought society was still debating “how we do that, and at what pace.” 

Science suggests the pace should be quick. This year, for the first time in recorded history, the planet crossed the critical threshold of 1.5 degrees Celsius over pre-industrial levels for a full 12-month period, according to the European Union. 

The United Nations has warned that, because of the continued burning of fossil fuels, the world will miss its goal of halting global warming at that key level. Without accelerated change, widespread death and suffering is in store for people and wildlife as a result of the heatwaves, droughts, flooding and sea level rise that will be unleashed by unchecked climate change.

For life on Earth, the pace of decarbonization could go a little bit faster.

Like a kid in a candy store
When those boxes of heavily redacted documents start to pile in, reporters at The Narwhal waste no time in looking for kernels of news that matter the most. Just ask our Prairies reporter Drew Anderson, who gleefully scanned through freedom of information files like a kid in a candy store, leading to pretty damning revelations in Alberta. Long story short: the government wasn’t being forthright when it claimed its pause on new renewable energy projects wasn’t political. Just like that, our small team was again leading the charge on a pretty big story

In an oil-rich province like Alberta, that kind of reporting is crucial. But look at our investigative work on TC Energy’s Coastal GasLink pipeline to the west, or our Greenbelt reporting out in Ontario. They all highlight one thing: those with power over our shared natural world don’t want you to know how — or why — they call the shots. And we try to disrupt that.

Our journalism is powered by people just like you. We never take corporate ad dollars, or put this public-interest information behind a paywall. Will you join the pod of Narwhals that make a difference by helping us uncover some of the most important stories of our time?
Like a kid in a candy store
When those boxes of heavily redacted documents start to pile in, reporters at The Narwhal waste no time in looking for kernels of news that matter the most. Just ask our Prairies reporter Drew Anderson, who gleefully scanned through freedom of information files like a kid in a candy store, leading to pretty damning revelations in Alberta. Long story short: the government wasn’t being forthright when it claimed its pause on new renewable energy projects wasn’t political. Just like that, our small team was again leading the charge on a pretty big story

In an oil-rich province like Alberta, that kind of reporting is crucial. But look at our investigative work on TC Energy’s Coastal GasLink pipeline to the west, or our Greenbelt reporting out in Ontario. They all highlight one thing: those with power over our shared natural world don’t want you to know how — or why — they call the shots. And we try to disrupt that.

Our journalism is powered by people just like you. We never take corporate ad dollars, or put this public-interest information behind a paywall. Will you join the pod of Narwhals that make a difference by helping us uncover some of the most important stories of our time?

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