Update, June 28, 2023 — A delegation of Indigenous, Black, People of Colour, and other climate leaders have issued an open letter to the Royal Bank of Canada’s (RBC). The letter has been issued two months after RBC’s Annual General Meeting (AGM), and contains the demands and concerns from the delegation after experiencing discriminatory treatment at the AGM.
The delegation representing marginalised communities and climate leaders arrived at the AGM with valid proxies from shareholders, ready to actively participate in the discussions and decisions affecting RBC’s future. However, a reserve system based on colour-coded passes resulted in their unjust exclusion from the main meeting room and stripped them of their right to participate in voting at the AGM.
As a result, this letter emphasises the need for an official apology from RBC and calls for concrete actions to prevent such discriminatory practices from recurring.
The delegation is calling for the following:
- A formal acknowledgement of wrongdoing in the exclusion of proxy holders into a segregated room.
- An apology.
- Commitments from RBC going forward that Indigenous participation will be respected and that respect is demonstrated by:
- Equitable treatment for Indigenous shareholders and proxy holders.
- Full participation without segregation.
April 5, 2023 — Today The Royal Bank of Canada held its Annual General Meeting in Saskatoon, Saskatchewan. The meeting’s rocky and delayed start was an indication of the mess to come. And the jazzy hold music for folks dialling in remotely was a jarring soundtrack to the videos and posts rolling in on Twitter that served as the explanation for the hour-long delay.
RBC is refusing entry to Wet’suwet’en hereditary chiefs, Indigenous elders, and sending folks to a secondary room where they won’t be able to address @RBC CEO directly.
— Stand.earth (@standearth) April 5, 2023
In what has become an annual tradition, RBC made last minute changes to its AGM that resulted in Black and Indigenous environmental justice leaders (with proxies to attend the meeting) being shut out of the room designated to bring bank management, the board, and shareholders together.
Yesterday, the bank set up two rooms to split attendees with proxies: In a side room without video conferencing, Indigenous leaders, Black representatives from frontline communities, and members of civil society were partitioned off from the main room secured by guards where the majority of shareholders, bank management, and board members sat together face-to-face as planned.
“We were registered as proxies, we had every right to be there. This is another form of racism. Separating us into another room is another form of segregation. Snipers on the building across from us. Using the same violence they use against us on our territories everyday.” pic.twitter.com/7fTd49JGeg
— Maya Menezes (@MayaLillianM) April 5, 2023
This coupled with the unusually remote location chosen by the largest bank in Canada for the biggest annual meeting could be seen as in step with a theme of creating barriers to access.
Indigenous leaders, frontline community and civil society voices dominate the AGM
Comment after comment, question after question: Indigenous leaders, frontline community members, and other representatives of civil society spoke to the bank’s dangerous commitment to fossil fuels and its blatant disregard of Indigenous communities’ rights.
They reiterated the importance of voting for shareholder proposals calling for:
- A resolution to revise its Human rights Position Statement to cement and operationalize its commitment by explicitly reference Free, Prior, and Informed Consent in its Human Rights Position Statement
- A resolution that calls on RBC to develop and publish 2030 targets and provide transparency on its contribution to high emitting sectors about absolute emissions reduction plans in line with climate science net zero pathways
- A resolution that calls for a time-sensitive policy to phase out any further funding of companies and projects tied to new fossil fuel exploration, development, and transportation
Over the audio connection, speakers from the side room emphasized the harm that RBC’s financing of fossil fuel projects is inflicting on their communities now. And they pointed to the enormous risks that financing these projects poses to RBC shareholders if management does not implement science-based policies and policies that are compliant with human rights standards.
All the while, protesters made noise from outside the building, loud enough to be heard in the protected main room.
— For Our Kids (@ForOurKidsCAN) April 5, 2023
Near the end of the shareholder meeting, it was abundantly clear that despite their best efforts, RBC had lost control of the narrative. Before opening for a brief Q&A, CEO David McKay clumsily and verbosely attempted to quell any disquiet that may have been stirred up amongst main room shareholders by referencing his own family and hopes for the future. He repeated the phrase ‘orderly transition,’ with an emphasis on ‘orderly’ enough times to drive home that this phrase was a critical tenet of his damage control talking points. And in an explicit attempt to pour cold water on any discussion of his bank’s funding of the Coastal Gas Link, he simply declared that RBC was not accountable for the fossil fuel project that it provides funding to and generates profit from.
Before the results were announced, RBC bookended its meeting with a showcase of it latest brand video, entitled Ideas Happen Here.
Shareholder voting results
The shareholder vote counts were finally announced, with interesting results:
- One in four shareholders supported a resolution to operationalize Indigenous Free, Prior, and Informed Consent. This quarter of shareholders represents about CAD$25 billion.
- 16% of shareholders voted for the New York City Comptroller’s resolution calling on RBC to commit to 2030 absolute emissions reduction targets for oil, gas and utility clients. More than 5% of shareholders abstained to vote on this resolution, meaning that roughly 22% of RBC’s shareholders refused to support management’s call to vote against the proposal. This 22% of shareholders represents about CAD$22 billion.
- Roughly 6% of shareholders voted for Stand.Earth’s resolution calling on the bank to implement a policy for a time-bound phase out of new fossil fuel investments. Just over 4% of shareholders abstained on this vote, too, meaning that 11% of shareholders rebuked management on this proposal, too. This 11% of shareholders represents about CAD$10 billion.
So what does it all mean for investors?
In the Canadian bank context where they all dominate each other’s investor list (five of Canada’s biggest banks own more than 14% of RBC’s shares, for example), we know that they will be holding the management line to shore up reciprocal support for their own. And when you add Vanguard and BlackRock to that list of top RBC shareholders — asset managers that can be counted on to steer clear of action-oriented shareholder proposals — it’s clear that the resolution voting results must be seen for what they represent.
These votes demonstrate that a critical and growing number of shareholders are demanding operationalized and actionable climate and human rights policies. And an even bigger number of shareholders refuse to support management’s insistence that the path forward is business as usual.
However, it goes without saying that there are still far too many investors sleeping on the job. The bottom line is that RBC exposes its investors to significant financial and credit risks, reputational damage and future legal and regulatory consequences coming down the pike.
Shareholders hold the power to push companies embedded in fossil fuels, like RBC, to take action to protect the profitability of their investments, the longevity of the business they invest in, as well as communities and the climate from harm.
With the 2023 AGM season only just starting, RBC’s AGM should not just be a cautionary tale but an alarm clock. Investors: the tide is turning and it’s time to work out if you want to go down with the old guard or protect your portfolio as the economy transitions.
Photo credit: Katie Wilson, 2023.