Royal Bank’s climate policies have been deemed weak enough to pass a Texas test of whether banks boycott oil and gas companies.
State Comptroller Glenn Hegar last week identified ten financial institutions, including BlackRock, Credit Suisse Group and UBS Group, that he says are boycotting fossil fuels, which under a law passed l last year banned them from being active in the government bond market.
Major U.S. banks, including Citigroup, Goldman Sachs, Bank of America and JPMorgan Chase, ended their involvement in the government bond market last year after similar legislation targeting financial institutions was passed. who “boycott” firearms manufacturers and associations.
The state’s definition of an energy company boycott includes any action, without an ordinary business purpose, taken to limit a bank’s business relationship with an oil and gas company because the latter fails to exceed minimum environmental requirements. .
Royal Bank was one of 19 financial institutions targeted by Texas for further investigation — not least because of its commitment to offer carbon-neutral loans by 2050.
In a written response to the state inquiry, Royal Bank said it values its relationship with Texas, noting that it provides financial services to many companies in the oil and gas industry. gas company and that it was exposed to the sector’s credit risk, valued at US$25 billion.