The Royal Bank of Canada was the biggest fossil fuel financier in the world in 2022 after handing over more than US$42 billion to oil, gas, and coal projects, a coalition of environmental groups reports in the annual Banking on Climate Chaos report survey yesterday.
RBC’s funding between 2016 and 2021, the first six years after the Paris climate agreement was adopted, put it as the fifth-largest fossil fuel funder, The Canadian Press reports. 2022 was the first year it provided the most fossil funding.
The report also identifies RBC as the year’s leading international funder for oil and gas fracking, an extraction method that produces extreme emissions of methane—a climate super-pollutant that is about 85 times more potent than carbon dioxide over a 20-year span. The bank poured $7.4 billion into fracking in 2022, for a seven-year total of $43.4 billion.
Just last week, the U.S. National Oceanic and Atmospheric Administration (NOAA) reported an “alarming” increase in global methane emissions.
Among Canadian banks, Scotiabank ranked ninth globally last year with $29.5 billion in funding. TD was just behind it at about $29 billion, while Bank of Montreal ranked 15th and CIBC 16th at $19.3 billion and $17.9 billion respectively.
The report concludes that the world’s 60 biggest banks have poured $5.5 trillion into the fossil industries over the last seven years, including $673 billion in 2022, “driving climate chaos and causing deadly local community impacts.” It spotlights the Coastal GasLink and Trans Mountain pipelines as two of a series of local hot spots around the world.
Of those 60 big banks, 49 have made commitments on paper to achieve net-zero emissions, the report says.
The Banking on Chaos report is published each year by Rainforest Action Network, Banktrack, the Indigenous Environmental Network, Oil Change International, Reclaim Finance, the U.S. Sierra Club, and Urgewald. The 2023 edition points to:
• $67 billion for the top 30 fracking companies, with RBC and JPMorgan Chase providing the largest shares of the funding for the methane-intensive extraction method;
• $34 billion for offshore oil and gas development, led by European banks BNP Paribas and Crédit Agricole along with Japan’s SMBC Group;
• $23 billion in financing for the 30 biggest liquefied natural gas (LNG) producers, nearly a 50% increase over 2021;
• $21 billion in new financing last year for the top oil sands companies, with TD, RBC, Bank of Montreal, and other Canadian lenders putting up 89% of the total;
• $13 billion for the world’s 30 biggest coal companies, 97% of it provided by banks based in China;
• $2.9 billion for Arctic oil and gas development, with three Chinese banks supplying the largest share of the funds and 26 institutions chipping in;
• $769 million for oil and gas projects in the environmentally fragile Amazon region.
At RBC’s annual shareholder meeting last week, CEO Dave McKay sought to defend his company’s fossil funding and climate record by emphasizing the importance of energy security and an orderly transition away from fossil fuels, CP writes. He said instability in food, energy, or security will throw off efforts to rein in climate change.
“Where any of those, one or more of those elements, aren’t present, then the focus on this critical climate journey is put aside.”
Just two weeks before the RBC AGM, the Intergovernmental Panel on Climate Change pointed to precisely those impacts and many others as direct results of the fossil fuel extraction and expansion that RBC has been working so hard to finance.
McKay also fell back to the fossil industry talking point that individuals and households will have to deliver the deep structural changes required to get greenhouse gas emissions under control…while his own institution invests lavishly to throw more fuel on the fire.
“We are putting all the pressure in society on the manufacturing supply side to change and make it an easy journey for us as citizens,” he declared. “So far, for the most part, we’ve appeared unwilling to change our consumption behaviours or mobility behaviours to lower our footprint.”
Those comments come as the bank faced a barrage of criticism from those pushing for shareholder resolutions, especially on stronger and faster climate action but also racial equity, and executive pay, and Indigenous rights, CP writes.
Grand Chief Stewart Phillip, president of the Union of British Columbia Indian Chiefs, presented a resolution pushing the bank to implement free, prior and informed consent (FPIC) as he raised concerns about the bank’s involvement in the Coastal GasLink pipeline.
“Failures to adequately incorporate FPIC is a material risk that has already caused reputational harm, as well as delays, cost increases and conflict on the land,” he said.
McKay said the bank can’t be held responsible for the day-to-day operating issues of the pipeline construction, while consent issues are difficult questions that need collaboration to resolve.
“Free prior informed consent is a very complex issue that has to be led by Indigenous communities, governments, and those businesses that own and operate the assets and the projects in question.”
Several attendees speaking for resolutions, including Wet’suwet’en hereditary chief Na’Moks, also criticized the bank for relegating them to an overflow room at the meeting where they were unable to address bank executives in person.
“(I’ve) never been so insulted in my life,” Na’Moks told a crowd gathered outside the hotel.
Some hundred or so demonstrators had gathered before the meeting. Many wore ribbon skirts and some held signs calling RBC the “Oil Bank of Canada” and called for the bank to “stop funding ecocide.”
Of the eight shareholder proposals that went to a vote, one pushing for the bank to undertake a racial equity audit secured the highest support at about 44%, while the resolution on Indigenous consent garnered 28% support.
A resolution pushing RBC to set absolution emission reduction targets got 22% support, while one trying to get the bank to stop funding fossil fuel expansion secured about 11%.
Greenpeace Canada senior energy strategist Keith Stewart said in a statement that RBC becoming the world’s largest fossil fuel funder shows bankers can’t be trusted to do the right thing on climate change, so they need to be regulated to do so.
Major portions of this story were first published by The Canadian Press on April 5 and 13, 2023.
