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illuminem summarises for you the essential news of the day. Read the full piece on Financial Post or enjoy below:
🗞️ Driving the news: Royal Bank of Canada (RBC), the country's largest bank, announced it is scrapping a major climate commitment to facilitate $500 billion in sustainable finance, citing methodological concerns and recent amendments to Canada's Competition Act
• The bank is also withholding disclosures on its energy supply ratio and progress towards a $35 billion low-carbon energy financing target, citing the same legal constraints around substantiating environmental claims
🔭 The context: Amendments to Canada's Competition Act were introduced to curb greenwashing by requiring companies to substantiate any environmental claims
• RBC had faced growing shareholder pressure to improve climate transparency, particularly from major investors like the New York pension system
• The bank’s original commitments were part of a broader trend among financial institutions responding to regulatory and reputational pressures to align financing activities with climate goals
🌍 Why it matters for the planet: RBC’s withdrawal signals a potential setback for financial sector leadership in climate action, particularly given the critical role banks play in steering capital toward low-carbon transitions
• Without transparent reporting, it becomes harder for stakeholders to assess progress against global net-zero targets
• There is also a risk that other institutions may follow suit, weakening broader market accountability on climate finance
⏭️ What's next: Stakeholders, including advocacy groups and policymakers, are likely to intensify calls for stronger regulatory requirements to ensure meaningful climate disclosures
• There may also be increased scrutiny of RBC's internal methodologies and comparisons against third-party standards like BloombergNEF
• The move could influence upcoming federal discussions on mandatory climate reporting and the development of legally enforceable sustainability standards in Canada
💬 One quote: “RBC’s refusal to disclose its energy financing ratio suggests a lack of confidence in its own methodology.” — Tanya Jemec, finance lawyer at Ecojustice
📈 One stat: Under BloombergNEF’s methodology, RBC is among the worst performers globally in balancing financing between high- and low-carbon energy sectors
See on illuminem's Data Hub™ the sustainability performance of RBC and its peers TD Bank, Scotiabank, and CIBC
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