Royal Bank of Canada (RBC) announced today that it plans to incorporate climate considerations into the medium- and long-term incentive plans for its top executives, including the bank’s CEO and Group Executives, beginning this year.
The plans for the modified incentive programs was unveiled in RBC’s 2022 Climate Report, issued today, which outlines the bank’s progress in managing climate-related risks and opportunities in line with its climate strategy, RBC Climate Blueprint. RBC also published its 2022 ESG Report today.
The objective to be added to the mid-term and long-term incentive plans will relate to the progress made against the Climate Blueprint’s strategic priorities, which include “Help clients as they transition to net zero,” with commitments including facilitating $500 billion in sustainable financing and expanding climate-related products and services; “Hold ourselves accountable,” which includes the bank’s net zero by 2050 lending goal and embedding climate factors into decision-making; “Inform and inspire a sustainable future,” including producing research on climate issues and policies and supporting climate literacy, and; “Advance net-zero leadership in our own operations,” with goals including reducing GHG emissions 70% by 2025, sourcing 100% of electricity from renewable and non-emitting sources, and maintaining climate neutrality in operations.
According to the Climate Report, the incentive plan update comes as the bank recognizes “that climate change is an increasingly important consideration for our shareholders and other stakeholders.” RBC stated that the new assessment will provide incentives for the CEO and Group Executives “to accelerate RBC’s progress on these key priorities through innovation and engaging with governments, businesses and individuals to facilitate meaningful global progress towards net-zero over the short, medium and long term.”
Dave McKay, President and Chief Executive Officer, Royal Bank of Canada, said:
“To tackle some of the greatest challenges our society faces, businesses, governments and individuals must work together with greater focus and more ambition. At RBC, we’re proud to play our part as we demonstrate and measure our progress to hold ourselves accountable.”