Royal Bank of Canada (RBC) announced today a series of new climate and sustainable finance commitments, launched at the bank’s inaugural Environment, Social and Governance (ESG) Conference. The company also announced that it will join climate-focused organizations Partnership for Carbon Accounting Financials (PCAF) and RMI’s Center for Climate-Aligned Finance.
Among the key goals announced by RBC is a new commitment to achieve net zero emissions in its lending by 2050, aligned with the global goals of the Paris Agreement, and a pledge to set interim targets to reduce financed emissions and to build out climate-related stress testing programs. The bank also committed to measure and report financed emissions for key sectors starting in its 2022 TCFD report. In addition, RBC will mobilize $500 billion in sustainable finance by 2025, after achieving its $100 billion target in 2020.
The PCAF is a global collaboration of nearly 100 financial institutions, representing roughly $20 trillion in total assets. In joining the initiative, members have committed to measuring and reporting the greenhouse gas emissions associated with loans and investments. RBC is the second Canadian Bank to join PCAF this week, following an announcement by CIBC.
RBC is the third major bank this week to join RMI’s Center for Climate-Aligned Finance, following announcements by TD and CIBC. Clean energy organization RMI founded the Center in July 2020, aiming to enable financial institutions, corporations, and experts overcome practical obstacles to climate alignment. The Center works across industries to shape sectoral climate alignment initiatives for high-emitting industries and contributes to the development of global solutions, practices, and frameworks, aligning financial decision-making with the decarbonization of the real economy.
Dave McKay, President and CEO, RBC, said:
“Climate change is one of the most pressing issues of our time, requiring us to work more closely with our clients, peers, across industry sectors and with government to help build a sustainable economy for future generations. Our updated climate strategy reinforces the important role RBC has to play in helping clients and communities through the transition to a net-zero economy by 2050. Our commitment to advancing our clients’ ESG goals and accelerating society’s progress is underpinned by our belief that capital can be a force for positive change.”