RBC Pioneers Decarbonisation Finance Initiative

The Royal Bank of Canada (RBC) has launched a pioneering “decarbonisation finance” category within its Sustainable Finance Framework. This innovative initiative aims to provide enhanced transparency and guidance to clients involved in decarbonisation activities, particularly targeting high-emitting, hard-to-abate sectors such as natural gas, steel, and cement.

Recognising the essential role these sectors play in the economy while acknowledging the pressing need for emissions reduction, RBC’s initiative strikes a delicate balance between supporting vital industries and driving meaningful contributions to transition plans. The eligibility criteria outlined by RBC for decarbonisation activities reflect a pragmatic approach, emphasising the importance of robust transition plans from clients, evaluated under the bank’s sector-specific transition readiness framework.

Importantly, RBC acknowledges the inherent challenges faced by various sectors in achieving 1.5°C aligned emissions reduction targets, demonstrating an understanding of the complex dynamics within sustainable finance and the urgency for decisive action amidst ongoing economic transformation.

As part of its commitment to supporting the transition to a low-carbon economy, RBC has set ambitious financial targets. The bank aims to increase its low-carbon energy lending to $35 billion by 2030 and triple its renewable energy lending across RBC Capital Markets and Commercial Banking from its current base of $5.2 billion. Additionally, RBC plans to allocate $1 billion by 2030 to foster the development and scaling of innovative climate solutions.

Jennifer Livingstone, Vice President, Climate at RBC, emphasised the significance of these actions, stating, “The actions we are announcing today will help support our clients in their efforts to reduce emissions, contribute to bringing more renewable energy online and provide needed capital to innovative climate solutions.” Livingstone’s statement underscores RBC’s commitment to facilitating the transition to a low-carbon economy and highlights the bank’s role in supporting clients through the provision of innovative financial solutions.