Royal Bank of Canada (RBC) has dropped its sustainable finance commitments, citing recent changes to the country’s Competition Act.
In 2021, Canada‘s largest bank pledged to add $500 billion to its sustainable finance framework by 2025, having hit a previous target of $100 billion – however in its most recent sustainability report, it noted that it was ‘retiring’ its sustainable finance commitment.
‘Evolving’ industry practices
‘Since first announcing our commitment [in 2019], industry practices for measuring and reporting on sustainable finance have evolved,’ the group said in its report. ‘We have reviewed our methodology and have concluded that it may not have appropriately measured certain of our sustainable finance activities as presented on a cumulative basis.’
It noted that changes to the Competition Act in June 2024 saw the introduction of ‘new provisions governing representations about the environmental benefits of products and business activities.
‘In light of these developments, we will no longer be using this methodology going forward, and we are also retiring our sustainable finance commitment. Finally, we are considering potential changes to our overall approach to sustainable finance, including our Sustainable Finance Framework. We intend to disclose any material changes in a future sustainability report.’
It added that it ‘remains committed’ to sustainable finance, and will continue to report on this area ‘in a clear and transparent manner in compliance with applicable laws’.
A page dedicated to the bank’s Sustainable Finance Framework appears to have been removed from its website.
Withdrawal from NZBA
The move follows RBC‘s withdrawal from the Net-Zero Banking Alliance (NZBA) earlier this year, one of a host of global financial institutions to pull out of the agreement.
“Expectations of RBC are high, and I want you to know that we are steadfast in our efforts to continue building a bank that helps our stakeholders navigate the opportunities that change can bring, and create a positive impact for our business, our clients and across society,” Dave McKay, RBC’s president and CEO, noted in his introduction to the report. Read more here.
