Royal Bank of Canada (RBC) released today new interim financed emissions reduction targets for several carbon-intensive sectors, including oil & gas, power generation, and automotive.
The new goals form part of the RBC’s commitment to reach net zero in its lending portfolio by 2050. The bank announced its net zero commitment in February 2021, alongside a goal to mobilize $500 billion in sustainable finance by 2025.
RBC’s new 2030 goals include achieving a 35% reduction in Scope 1 and 2 and between 11%-27% in emissions intensity in Oil & Gas upstream, downstream and integrated, which account for the largest proportion of the emissions footprint for the sector. In the Power generation sector, RBC is targeting a 54% reduction in Scope 1 emissions intensity for electricity generation, while its goal for the automotive sector, covering manufacturing and financing, is for a 47% reduction for combined Scope 1, 2 and Scope 3 “tank-to-wheel” emissions.
The interim targets also align with the bank’s commitments as a member of the Net Zero Banking Alliance (NZBA), a UN-convened coalition of banks dedicated to advancing global net zero goals through their financing activities. RBC joined the NZBA in October 2021, alongside its Canadian banking peers BMO, CIBC, National Bank of Canada, Scotiabank, and TD.
The bank also introduced its Sustainable Finance Framework, outlining its strategy to provide $500 billion in sustainable finance by 2025. The framework outlines RBC’s basis for classifying, tracking and disclosing performance towards its target, and include eligibility criteria for various forms of sustainable finance, from dedicated purpose-based financing directed towards green or Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More activities, to general corporate purpose financings for “pure-play” sustainability-focused entities, and sustainability—linked transactions.
Dave McKay, President and CEO at RBC, said:
“We know the greatest impact RBC can have to drive emissions reductions in the economy is through partnerships with our clients. Our initial interim targets will help us track and measure how we’re doing in working with our clients on our ambitious net-zero goals and keep us accountable along the way.”