Included are all shareholdings of 1% and greater. Source: Orbis Database, October 2018.

Since 2007, RBC has cited climate change as a top priority in its environmental, social and governance (ESG) strategy.¹ With the other big Canadian banks, RBC is a signatory to the Equator Principles, a framework for determining whether potential business activities (such as financing) impinge on the protection of natural habitats or Indigenous rights. Yet its grade from CDP (the Carbon Disclosure Project—a global disclosure program for corporations that tracks their environment impact) is poor. RBC received a C in 2018. RBC has also formally acknowledged the Paris Agreement and its goal to maintain global warming to 2 degrees Celsius, stating that the bank has “an important role to play in supporting an orderly and socially inclusive transition to a low carbon economy.”²

But this role has yet to be realized. In its investment practice, RBC will only commit to addressing clients’ climate risks stemming from already imposed state regulations. This strategy has some critical limitations: Alberta’s oil sands emissions cap, for example, still allows emissions from oil sands production to increase 45 per cent above 2014 levels, and thus falls short compared to the federal government’s pledge under the Paris Agreement to curb emissions by 30 per cent below 2005 levels by 2013.³ All told, managing climate risks to the tune of insufficient policy measures, RBC appears to be shirking its responsibility to meaningfully address the unprecedented carbon weight of its portfolio.

RBC’s real stance on fossil fuels and climate change is demonstrated clearly through its lending portfolio. RBC is one of the world’s largest funders of “extreme oil”—a term referencing oil that is particularly energy intensive to extract, such as oil sands, Arctic or ultra-deepwater.⁴ The Fossil Fuel Finance Report Card (produced by Rainforest Action Network in collaboration with over 25 other organizations) found that RBC has the largest single stake in oil sands operations among the world’s banks, with over US$11 billion invested in 2017 alone. It also holds just over $2 billion in both coal (mining and power generation) and LNG export financial assets. In terms of its conventional and unconventional oil and gas assets, RBC holds the second-largest investment stake out of all the world’s banks.⁵

In addition to lending commitments, RBC holds significant shares in large Canadian (and international) fossil fuel firms. The table below shows RBC’s top 15 shares in fossil fuel companies, through its funds.

INSERT TABLE RE: TOP 15 FF SHARES

Statements from RBC’s CEO, David McKay, further demonstrate the company’s vested interest in oil and its contradictory stance on climate change. During a speech to the Edmonton Chamber of Commerce, McKay commented on the importance of getting fossil fuels to market through new bitumen pipelines, stating that when it comes to regulatory approvals for pipelines, “RBC has a big stake in Canada getting this right,” adding that RBC should be viewed as “Canada’s leading energy bank.”⁶

Oil Change International calls out RBC as a laggard on climate action

The Fossil Fuel Finance Report Card gave RBC a dismal D for its fossil fuel investment practices. A D grade signifies that the bank has done its “due diligence” by disclosing policies and processes around its financing for oil sands, deepwater and Arctic oil projects but has failed to take any steps to reduce the share of these assets in its portfolio.⁷

Conflicts of interest and the Dakota Access pipeline:

RBC received widespread criticism for its investments in the Dakota Access project, a pipeline running from the Alberta oil sands to the US that violates the rights and title of the Standing Rock Sioux Tribe. Protests identified RBC, alongside TD, Canada Trust and Scotiabank, as the biggest Canadian supporters of the project.⁸ In 2016, RBC was accused of conflict of interest when it upgraded its assessment of Enbridge while also holding a major financial stake in the Dakota Access pipeline—which also happened to be one of Enbridge’s joint projects. As it encouraged its investors to buy Enbridge stock via its assessment of the company, RBC held $350 million worth of interests in Energy Transfer Partners, a company which pools funding for the Dakota Access project with Enbridge, Phillips 66 and Marathon Oil.⁹

RBC’s stake in the Trans Mountain pipeline:

RBC was one of the largest funders of the Trans Mountain pipeline while it was still owned by Kinder Morgan Canada, having helped grant the company a C$5.5 billion line of credit.¹⁰ After the pipeline project was sold to the Canadian government, RBC continued to be one of two major banks providing financial security to the project through Export Development Canada—the Crown corporation tasked with helping manage the project’s financing agreements.¹¹

The expanded pipeline—which promises to ship 590,000 barrels of crude oil from the Alberta oil sands each day—has sparked unprecedented opposition from Indigenous nations, municipal and provincial governments and environmental groups. The Tsleil-Waututh, Squamish, Musqueam and Sto:lo Nations are among the seven First Nations who challenged the project in court,¹² and the Treaty Alliance Against Tar Sands Expansion, comprising more than 120 First Nations and Tribes who oppose oil sands development in their territories, has called for an international divestment campaign against all financial institutions funding the pipeline.¹³

In August 2018 the Federal Court of Appeal quashed the approval of the pipeline, finding that consultation with Indigenous peoples along the proposed pipeline route had fallen short, and that the environmental approval process had failed to fully assess the impacts of tanker traffic on the marine environment. In early 2019, the National Energy Board came back with its response, suggesting that while the increase in tanker traffic from the project would hurt populations of southern resident killer whales and increase greenhouse gas emissions, its “considerable benefits” to Canada’s oil industry meant that it continued to be in the national interest.¹⁴