Royal Bank of Canada (RBC) issued new interim financed emission reduction objectives for various carbon-intensive industries, including oil & gas, power generation, and automotive.
The new objectives are part of RBC's ambition to have a
net-zero loan portfolio by 2050. The bank's net zero pledge was announced in February 2021, along with a target to mobilize $500 billion in sustainable finance by 2025.
RBC's new 2030 objectives include attaining a 35% reduction in Scope 1 and 2 and between 11% and 27% in emissions intensity for upstream, downstream, and integrated Oil & Gas operations, which account for the biggest amount of the sector's carbon footprint. RBC aims for a 54% decrease in Scope 1 emissions intensity for electricity generation in the Power generating sector, and a 47% reduction in "tank-to-wheel" emissions for the automotive sector, which includes manufacturing and finance.
The interim aims are also consistent with the bank's commitments as a member of the Net Zero Banking Alliance (NZBA), an UN-convened group of banks committed to promoting global net-zero goals through their financing activities. RBC joined the NZBA in October 2021, joining BMO, CIBC, National Bank of Canada, Scotiabank, and TD, its Canadian banking competitors.
Additionally, the bank released its Sustainable Finance Framework, which outlines its ambition to offer $500 billion in sustainable financing by 2025. The framework outlines RBC's basis for classifying, tracking, and disclosing performance towards its target, as well as eligibility criteria for various forms of sustainable finance, including dedicated purpose-based financing directed towards green or social activities, general corporate purpose financings for "pure-play" sustainability-focused entities, and sustainability-linked transactions.
RBC President and CEO Dave McKay stated:
"We recognize that the most significant influence RBC can have on reducing emissions in the economy is through partnerships with our clients. Our early intermediate targets will help us track and measure our progress in achieving our ambitious net-zero goals in collaboration with our clients, and hold us accountable along the way."
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