Royal Bank of Canada investors on Wednesday voted against shareholder proposals concerning racial equity and climate impact after proxy holders raised a volley of concerns about the bank’s financing of fossil fuels and its impact on Indigenous people .
Proposals filed by the British Columbia General Employees’ Union called for Royal Bank of Canada to publish a third-party racial equity audit analyzing its impact on non-white stakeholders and communities of color. The company also faced three proposals related to the bank’s climate impact from its lending and investment activities.
Another failed proposal asked that RBC update its human rights statement over how its business practices impact Indigenous people. RBC has been criticized in particular for its financing of the Coastal GasLink Pipeline through the Wet’suwet’en territory in British Columbia.
The bank faced questions from several proxy holders over its investment in oil and gas projects and the potential harm to Canada’s Indigenous people and negative environmental impact. A handful of proxy holders accused the company of barring Indigenous people and people of color from attending the main meeting room as they asked questions from an overflow room. The company said the overflow room was for proxy holders and that it was trying to accommodate the large turnout.
About 56% of shareholders voted against the racial equity audit proposal. The proposal highlighted that RBC has faced negative media coverage over alleged discrimination over how some customers and employees have been treated, including allegations of high-pressure sales tactics and racism and sexism in the workplace. “We urge RBC to assess its behavior through a racial equity lens in order to obtain a complete picture of how it contributes to, and could help dismantle, systemic racism,” the shareholders said in the proposal.
Emma Pullman, capital stewardship officer for the BC General Employees Union, told Bloomberg Law after the meeting that she was pleased that the racial equity audit proposal secured significant support. “I think it sends a very strong message,” she said. “It’s not a question of if they’ll conduct a racial equity audit, I think it’s a question of when.”
RBC didn’t immediately respond to a request for comment after the vote.
In its proxy statement, RBC said: “We acknowledge wide-spread systemic racism has disproportionately disadvantaged Black, Indigenous and people of color for far too long, significantly impeding the ability of those communities to compete equally in opportunities for economic and social advancement, and we are taking direct actions to tackles these issues. RBC does not tolerate discrimination in any form, including in the way we conduct business, our relationships with clients, or the way we treat our colleagues.”
Eugene Kung, a staff lawyer at West Coast Environmental Law who also spoke at the meeting, told Bloomberg Law that the dispute over the separation of proxy holders, many of whom were Indigenous people and people of color, “if anything really demonstrates why these proposals we filed are needed and need to be taken seriously by RBC.”
The climate proposals included a call for the company to disclose absolute greenhouse gas emissions reduction targets for 2030 from its lending and underwriting activities for power and oil and gas sectors. Absolute emissions provide details on the reduction in total emissions.
The bank has pledged to reach net zero emissions by 2050, but has set 2030 interim goals that call for lowering the intensity of emissions that its oil and gas clients generate from their operations by 35%. RBC is one of several banks that has faced criticism for using carbon intensity metrics—which measure the amount of carbon emitted by the companies relative to their total production—rather than hard emissions reduction targets.
“Intensity targets will measure the reduction in emissions per unit or per dollar, however, they will not capture whether the Company’s total financed emissions have decreased in the real world,” the proposal said.
The bank said it’s committed to the ultimate goal of emissions reductions. “RBC recognizes the importance of reducing absolute emissions and believes the measured, thoughtful and deliberate approach the bank has outlined, including setting physical emissions intensity targets, are appropriate at this point in the bank’s transition journey,” the bank said in its proxy statement.
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