Canada’s largest bank provided more money to the fossil fuel sector last year than any other bank in the world, new financial data reveals.
In 2022, RBC financed coal, oil and gas companies to the tune of US$42.1 billion, edging out U.S. banking giant JPMorgan Chase for the carbon crown, according to the annual Banking on Climate Chaos report published Thursday. Last year’s investments bring RBC’s total financing of the fossil fuel sector to US$254 billion since the Paris Agreement was signed in late 2015, when countries around the world committed to holding global warming as close to 1.5 C as possible.
Burning fossil fuels spews planet-warming greenhouse gas emissions into the atmosphere and is the primary driver of climate change. Despite making promises to achieve net-zero emissions, RBC’s financing of the sector is fuelling its growth at a time when climate science demands fossil fuels must be rapidly phased out. Earlier this year, the United Nations Intergovernmental Panel on Climate Change said greenhouse gas emissions must be cut approximately in half this decade to avoid catastrophic warming. If they’re not, the planet will continue to overheat and is more likely to cross dangerous tipping points that lock in major, irreversible damage. In other words, any fossil fuel expansion is incompatible with the 1.5 C goal.
The fossil fuel investment data is sourced from financial databases and published in an annual report by a group of civil society organizations composed of the Rainforest Action Network, Indigenous Environmental Network, BankTrack, Oil Change International, Reclaim Finance, Sierra Club and Urgewald. It looks at the top 60 banks in the world and identifies at least US$5.5 trillion invested in coal, oil or gas companies in the seven years since the Paris Agreement was inked.
Despite the staggering total sum, of which RBC is a fraction, the data shows the bank is an outlier in global trends. While it’s true many banks continue to invest in fossil fuels, 2022’s overall financing fell from 2021 levels as fossil fuel companies enjoyed record profits spurred on by soaring energy prices. In that context, RBC’s increased financing is a clear step in the wrong direction, Stand.earth climate finance director Richard Brooks told Canada’s National Observer.
“It's totally obscene that we're in this situation and so clearly shows RBC is on the wrong track,” Brooks said. “This is why we need regulators to step in and regulate the banks into taking real climate action.”
RBC’s investments in fossil fuels compared to renewable energy paint a stark picture, he said. For every $99 RBC invested in fossil fuels from 2016 to 2022, $1 was invested in renewables, according to a study conducted by financial firm Profundo.
“When you dig into the numbers, more than 90 per cent of their financing is going to Canadian and U.S.-based oil and gas companies,” Brooks said. “Those companies are not reducing their overall emissions; they're not even being successful at reducing emissions intensity” — the amount of greenhouse gas pollution a company produces per unit.
RBC’s top fossil fuel clients last year, which helped catapult it to the top of the rankings, were the Canada Development Investment Corp. and energy giant Enbridge. The former is the Crown corporation behind the Trans Mountain expansion project, which was able to attract a $10-billion loan last year that RBC helped fill, alongside TD, Scotiabank, CIBC, BMO and the National Bank of Canada, after the federal government guaranteed taxpayers would pay the banks back if the company failed to do so.
“It's totally obscene that we're in this situation and so clearly shows RBC is on the wrong track...This is why we need regulators to step in and regulate the banks into taking real climate action,” says @R_BrooksStand #cdnpoli
Canada’s National Observer reached out to RBC, but the bank did not return a request for comment by deadline.
Last week at its annual general meeting, RBC shareholders shot down proposals urging the bank to set absolute emission targets for 2030, restrict financing for fossil fuel expansion and align with the United Nations Declaration of the Rights of Indigenous Peoples (UNDRIP), which requires consent from Indigenous nations for projects proposed on their land.
At the meeting, some RBC critics were not allowed in the main meeting room to challenge bank leadership directly, despite being registered to do so. Wet’suwet’en hereditary chiefs, who oppose the bank’s financing of the Coastal GasLink pipeline being built through the nation’s unceded territory, say they were insulted after security guards physically prevented them from entering the main meeting room and redirected them and others to a second meeting room to ask questions via livestream.
“We are the title holders. Coastal GasLink requires our free, prior and informed consent. They do not have it, Mr. McKay,” Wet’suwet’en hereditary Chief Na’Moks told RBC’s CEO from the second room.
His comments came approximately a week after the RCMP’s controversial Community-Industry Response Group (C-IRG) entered Wet’suwet’en territory and arrested a handful of land defenders in search of an allegedly stolen chainsaw.
“When C-IRG was created in 2017, with the full intent of unrestricted violence supported by the provincial and federal governments, it was to remove the Indigenous and human rights of all peoples of so-called democratic Canada,” Chief Na’Moks said in a statement. “The actions of this unit of the RCMP have proven that those who wish to protect clean water, lands, food security and the very air that we all breathe and depend on, are merely the ‘cost of doing business’ for industries, governments and the Royal Bank of Canada financing this corporate colonialism.
“The path RBC is on can be defined as either psychopath or sociopath — not a path for a better future.”
RBC is currently under investigation by Competition Bureau Canada over allegedly misleading Canadians about its climate performance following a complaint from Indigenous leaders and climate organizers. The bank “strongly disagrees with the allegations in the complaint,” an RBC spokesperson previously told Canada’s National Observer.