Royal Bank of Canada | Advisory vote on environmental and climate change objectives and action plan at the Royal Bank of Canada

Status
15.10% votes in favour
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
RY:CN
Lead filer
Vancity Investment Management
Resolution ask
Adopt or amend a policy
ESG theme
  • Environment
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Canada
Resolved clause
RESOLVED: It is proposed that the Bank hold an annual advisory vote on its environmental and climate change objectives and action plan
Supporting statement
SUPPORTING STATEMENT: According to an online survey conducted in October 2022 by Léger Marketing and the Association for Canadian Studies on behalf of The
Canadian Press, 70% of Canadians are worried or very worried about climate change. The high percentage of votes cast in support of
our shareholder proposal last year accurately reflects this concern in the country. Furthermore, this vote surely gives voice to the
concerns of the company’s shareholders regarding the scope of the environmental actions taken. The recent forest fires and last year’s
floods did little to attenuate their fears, and more likely stoked them.
A recent Oxfam Quebec report1
on the carbon footprint of Canadian bank portfolios invites shareholders to be more demanding as
regards the efforts devoted on that score. One observation drawn from this report bears highlighting:
“[N]ot only have none of Canada’s major DTIs committed to withdrawing from the fossil fuel sector in the short or medium term, but
they all persist in presenting themselves as participants in the energy transition and sustainable financing aimed at either
decarbonizing the processes of extraction, transformation and/or use of fossil fuels or supporting diversification of the “green”
asset portfolios of companies in the sector, particularly in the areas of green technologies and renewable energy.”
The report even describes their initiatives as unambitious:
“[T]he total C$850 billion pledged by BMO, RBC, Scotiabank, CIBC and TD for 2020–2030, while not inconsiderable, will ultimately
represent only two-thirds of their previously committed fossil fuel assets between 2016 and 2020 alone, which were in excess of
C$1.3 trillion.”
Little time remains to clean up our environment and make the world a better place for future generations. It is therefore important that
shareholders be allowed to express their opinions on the actions that our organizations intend to take over the next few years and push
them to be more proactive.
Interestingly, France has a “say on climate” bill2 that would require all listed corporations to submit their “climate and sustainability”
strategy to shareholders every three years or in the event of a material change thereto.
1 A closer look at the carbon footprint of Canadian bank portfolios, X. Hubert Rioux, Institut de recherche en économie contempor

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Anima SgrForAs shareholders would benefit from more information on the company's future GHG reduction plans to better assess how the company is managing the physical and transition risks associated with climate change effectively. An advisory vote would also provide investors an opportunity to express their views on whether the plan is meeting expectations over time.
Benguela Global Fund ManagersForBenguela Global Fund managers is in support of GHG reduction and transition to clean energy. We believe that shareholders will stand to benefit significantly from RBC's initiatives to enhance transparency regarding environmental goals and social responsibility. These initiatives could improve risk management by providing RBC with a clearer understanding of its climate exposure and clients' readiness for a low-carbon future. Additionally, aligning with the increasing investor focus on Environmental, Social, and Governance (ESG) factors positions RBC as a more appealing investment option. Lastly, the focus on areas like clean energy and the circular economy could present new business opportunities, thereby creating additional value for shareholders.

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