Sustainable Finance Lobbying Overview: Royal Bank of Canada (RBC) appears to have taken somewhat positive positions on sustainable finance policy, although details of its engagement with many policies remain unclear.

Top-Line Messaging on Sustainable Finance Policy: RBC has recognized the issue of short-termism and stated support for some regulatory action to incentivize longer term investments, but generally appears to support an ad-hoc approach to addressing flaws in the financial system instead of systemic reforms. RBC’s Global Asset Management (GAM) arm, in its 2023 Approach to Climate Change report, stated support for limiting temperature rise to 1.5C. In October 2021, RBC joined the Glasgow Financial Alliance for Net Zero's banking arm, the Net-Zero Banking Alliance, signaling a commitment to the goal of net-zero emissions by 2050. In a 2021 opinion piece, CEO David McKay encouraged Canada to increase its ambition in tackling climate change, but in an interview in 2020, McKay appeared to support continued investment in the fossil fuel sector. Additionally, a letter submitted to the Municipal Advisory Council of Texas in September 2022 shows evidence of RBC’s continued support for investing in fossil fuels. Across their 2022 ESG and Climate Reports RBC and RBC GAM have disclosed engagement with policymakers on sustainable finance issues, but details of this engagement are unclear.

Position on Regulated Corporate ESG Disclosure: RBC has outlined some positive positions on regulated corporate ESG disclosure. In its 2021 CDP response, RBC appears to support mandatory ESG disclosure in line with the TCFD. In its 2022 CDP response, though, RBC took a more mixed position on the US Securities and Exchange Commission’s (SEC) efforts to regulate climate disclosure, stating it supported the policy “with minor exceptions.” However, in its 2021 Corporate Governance and Responsible Investment (CGRI) report, RBC stated that, through industry associations, it had supported the SEC’s efforts to enhance climate-related financial disclosures and a RBC Capital Markets article from March 2022 appears supportive of the SEC’s proposed climate disclosure rule, saying it will provide “much-needed clarity.”

Position on Taxonomies and ESG Standards/Labels/Benchmarks: In its 2021 UK Stewardship Code Report, RBC GAM mentioned engaging with the Canadian Securities Administrators’ proposed guidance on ESG-related investment fund disclosures and the Government of Canada’s green bond framework, but details of these engagements are unclear. In a 2021 insights paper RBC advocated for a transition taxonomy for Canada that would allow investments in fossil fuels to be labeled “green” so that emissions-intensive sectors could access capital needed to make the transition to a low-carbon economy.

Position on Incorporating ESG Factors Into Investor Duties: In feedback to the US Department of Labor in 2020, RBC strongly opposed two rollbacks that sought to limit fiduciaries' ESG investing and voting around ESG issues. In its 2021 CGRI report RBC mentioned engaging with proposed guidance on ESG-related investment fund disclosures in Canada but details of this engagement are unclear. RBC also described engaging with the EU Sustainable Finance Disclosure Regulation (SFDR) but details of this engagement are unclear.

Position on Incorporating ESG Factors Into Risk Management/Prudential Regulation: In a 2021 insights paper, RBC outlined current financial regulatory efforts to incorporate climate risk into stress tests and capital requirements, but it is unclear whether it supports these efforts. In January 2022 RBC joined a consortium that is engaging with banking regulators and policymakers on climate risk policies, but details of this engagement are unclear. In RBC’s March 2023 Statement on Lobbying and Political Contributions RBC discloses direct and indirect engagement on climate risk regulations with US banking regulators, but details of this engagement are unclear.

Industry Association Governance: RBC has published a partial account of its industry associations’ positions on and engagement with specific sustainable finance policies, however, does not provide an account for some groups that are actively engaged on sustainable finance policy including the Bank Policy Institute (where CEO David McKay sits on the Board) and SIFMA.