Royal Bank of Canada | Fighting against forced labour and child labour in loan and investment portfolios at Royal Bank of Canada

Status
Filed
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
RY:CN
Lead filer
Mouvement d'éducation et de défense des actionnaires (MÉDAC)
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Human rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Canada
Resolved clause
Fighting against forced labour and child labour in loan and investment portfolios It is proposed that, starting in 2027, the Bank prepare a report for its shareholders and stakeholders on the measures taken during the previous year to prevent and reduce the risk of loans being granted to companies using forced labour and child labour in the production of goods produced, purchased or distributed by its customer base using the Bank’s financing for their operations.
Supporting statement
Note that on May 11, 2023, the Fighting Against Forced Labour and Child Labour in Supply Chains Act came into force. 1 This Act requires certain companies to file reports on their efforts to fight forced labour and child labour, the first of which must be filed by May 31, 2024. While this Act aims to protect children from exploitation and human rights abuses in supply chains, we propose that the Bank take a proactive stance on this issue by committing, as a good corporate citizen, to prevent and reduce the risk of its loan and investment portfolio including any form whatsoever of support for companies that use forced labour or child labour in their business operations. It is important to us that the Bank be more proactive for the following main reasons: 1. Even indirect financing of companies involved in forced child labour is incompatible with the core values of Canadians, the public human rights commitments of banks and stakeholder expectations. Scandals related to forced labour could: • trigger media and boycott campaigns; • permanently damage the brand and public trust; • affect relations with responsible institutional investors. 2. Major institutional investors, particularly those committed to the Principles for Responsible Investment (PRIs) and other ESG initiatives, demand rigorous management of human rights risks. Banks that fail to act in time expose themselves to protest votes at their AGMs and to divestment. 3. Quebec and Canada are positioned on the international stage as defenders of the rights of children and of ethical values. As influential economic actors, Canadian banks have a responsibility to live out these principles into their financial practices, thus reinforcing Canada’s credibility and influence. A proactive approach to reduce financing associated with forced child labour is not only a moral imperative, but also a strategy to manage risks, protect reputation and meet investor and stakeholder expectations. This will allow Canadian banks to take up their rightful role as responsible leaders in the global economy. This proposal received 25.35% of the votes cast at the last AGM. 1 https://www.parl.ca/legisinfo/en/bill/44-1/s-211

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